Amid multi-faceted economic challenges, Bangladesh's imports dropped 18.19 percent year on year to 33.68 billion U.S. dollars in the first half of the 2023-24 fiscal year from July 2023 to June 2024.

According to latest statistics of the Bangladesh Bank (BB), the settlement of letters of credit (LCs), generally known as actual imports, stood at 33,683.51 million dollars in July-December compared to 41,175.28 million dollars in the same period a year earlier.

In the July-December period, the BB data showed, Bangladesh's overall import orders also declined by 5.33 percent year-on-year.

The overall import orders, officially known as the fresh opening of import letters of credit, decreased to 32,929.31 in July-December against 34,784.72 million dollars in the same period of the last fiscal year, it showed.

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Bangladesh's trade deficit in the last 2022-23 fiscal year dipped by 48.41 percent year-on-year to 17.16 billion dollars amid shrinking forex reserves-depressed imports.

In its bid to boost Bangladesh's shrinking forex reserves, which now stand at around 20 billion dollars, the bank has taken various measures to discourage imports.

The central bank has recently set policies aimed at tackling challenges affecting the economy. The BB said that the main objective of its strategic directives in the half-yearly monetary policy, spanning from January to June 2024, is centered on upholding a vigilant, hawkish approach to monetary policy until inflation rates are effectively reined into a desired level.

The BB said it finds itself at a critical juncture as the economy navigates through the latter half of the fiscal year, facing a multifaceted economic landscape.

The bank said it has decided to increase its policy rate by 25 basis points to 8 percent from 7.75 percent to deal with the demand-side pressures while ensuring the required flow of funds to the priority and production sectors to promote supply-side activities.

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This was the ninth straight rate hike in the past 20 months as consumer prices have remained at an elevated level.

Bangladesh's inflation was at 9.93 percent last October, above the central bank's then-target of 6 percent for the current fiscal year from July 2023 to June 2024.