Bangladesh Bank (BB) on Sunday asked banks to open letters of credit (LC) for importing essential commodities to ensure stable supply in Ramadan at a minimum margin. The banking regulation and policy department of the central bank issued a circular in this regard and sent it to the top executives of the scheduled banks with an immediate effect. The financial sector regulator has issued the directive to regulate price and ensure enough supply of essential commodities such as edible oil, chickpeas, pulses, peas, onions, spices, sugar and dates during Ramadan. Read more: Monetary policy twice a year: BB According to the directives, the rate of cash margin to be reserved for import letters of credit (LC) of products. They issued the directive after recent meetings with trade bodies and the Ministry of Commerce. The businesses leaders have demanded that authorities allow them to open LC easily. The Bangladesh Bank tightened the LC opening to check unnecessary imports amid the foreign exchange crisis in the domestic market. Besides, the central banks also looked into the LC prices of goods, and whether it is arriving in the country at a due time or not because Bangladesh Financial Intelligence Unit (BFIU) and the BB in an investigation found that some traders smuggled money in the name of imports. Read more: General inflation in Bangladesh slightly down to 8.85% in Nov In some cases, the traders raised the price of goods from 20 percent to 200 percent in January-June this year. As a result, the central bank imposed strict monitoring on the LCs to protect against over-invoicing and under-invoicing.

The government on Monday waived Value Added Tax (VAT) on all types of edible oil to try to rein in the soaring prices of the essential commodity. The National Board of Revenue (NBR) issued a gazette notification in this regard. The notification stated that this tax relief will be effective from Monday. Traders will get this facility till next June 30. The traders have been demanding withdrawal of VAT at the import stage, but the NBR notification did not say anything about import. Earlier on Thursday, Finance Minister AHM Mustafa Kamal told a reporter after a government procurement meeting that the VAT has been withdrawn to control the market prices of edible oil. Also read: Consider maximum cut in import VAT on edible oil: Cabinet directs NBR Later, the finance minister said that the tariffs on essential commodities including edible oil, sugar and peas will be withdrawn soon. The NBR imposed 15 per cent VAT on soybean at production level and 5 per cent at the consumer level. Commerce Minister Tipu Munshi at a press briefing at his secretariat on the occasion of consumers’ rights day said that VAT on edible oil imports will be reduced by 10 per cent and VAT at the consumer level by 5 per cent. Also read: 5-litre can of soybean oil: The best gift a newly married couple could get At the same time, 15 per cent VAT will be withdrawn at the edible oil production level, he said.