Letter of Credit (LC) openings for essential commodities, industrial raw materials, and capital machinery have seen a significant rise as dollar supply increased with a stable exchange rate.
For the first five months (July–November) of FY 2025-26, the overall Letter of Credit (LC) opening for imports was around $29.69 billion, a modest 4.5 percent increase from the previous year.
LC openings for imports totaled approximately $29.69 billion, up slightly from $28.4 billion in the same period of FY25.
However, data shows a mixed trend in LC settlements, with some sectors experiencing a slowdown.
According to the latest report of Bangladesh Bank, LC openings for consumer goods rose by 10.64 percent during the first five months (July-November) of the FY2025-26 compared to the same period last year.
An analysis of the business sector data shows that a different picture emerges in the opening of LCs for industrial raw materials and capital machinery. In the first five months of the FY2025-26, both the opening and settlement of LCs for the import of industrial raw materials achieved a slight growth of 0.42 percent; where the amount of LCs opened was $10.29 billion and the amount of settlements was $9.69 billion.
On the other hand, the biggest change was observed in the import of capital machinery. The number of LCs opened in this sector increased by 32.22 percent to $911 million, indicating the growing interest of entrepreneurs in industrialization.
However, in contrast, the rate of LC settlements decreased significantly. LC settlements for capital machinery decreased by 16.77 percent to $745 million, indicating that despite the increase in new orders, the process of final payment or release of goods is progressing quite slowly because of the higher interest rate.
According to the report, in the first five months of the FY2024-25, LCs for consumer goods were opened at $2.58 billion. In the same period of the current fiscal year, it increased to $2.85 billion. That is, the number of LCs opened for consumer goods increased by $274.4 million.
On the other hand, in the first five months of the last fiscal year, LCs for consumer goods were settled at $2.43 billion. In the same period of the current fiscal year, it decreased to $2.41 billion. As a result, settlements decreased by $20.9 million.
In addition to consumer goods, LCs opened and settled for industrial raw material imports also increased by 0.42 percent.
According to Bangladesh Bank data, in the first five months of the FY2024-25, LCs were opened for industrial raw material imports at $10.25 billion. In the same period of the current fiscal year, it increased to $10.30 billion. That is, LCs opened increased by $40 million.
LC settlements have also increased in this sector. In the first five months of the last fiscal year, LC settlements for industrial raw materials were $9.65 billion. In the same period of the current fiscal year, it increased to $9.69 billion. As a result, settlements increased by $43.6 million.
According to sector stakeholders, during the Awami League government, the import of less important and luxury goods was controlled to maintain foreign exchange reserves. Currently, as expatriate income increases and the dollar crisis eases somewhat, relaxation in LC is needed so that there is no negative impact on the import of daily essentials goods.
According to the central bank, in the first five months of the 2024-25 fiscal year, LCs worth $689 million were opened for the import of capital machinery. In the same period of the current fiscal year, it increased to $911 million. That is, the LC opened in one year increased by 220.2 million dollars.
On the other hand, in the first five months of the FY2024-25, LCs for capital machinery were settled at $895.7 million. In the same period of the current fiscal year, it decreased to $745.5 million. As a result, settlements decreased by 150.2 million dollars.