Growth in the country’s import bill payment rose slightly in August, 2012 mainly due to higher import of petroleum, rice, sugar, pulses and chemical products, according to latest Bangladesh Bank (BB) data.
BB officials told New Age on Sunday that the growing trend of letters credit (LCs) settlements or actual import payment in August was a temporary phenomenon as the central bank is continuously discouraging the opening of LCs by commercial banks to import luxurious products.
Despite increasing trend of import payment in August, opening of new LCs declined significantly, they said, adding the central bank move was aimed at maintaining a healthy reserve of the foreign exchange.
BB data showed that the growth in settlement of LCs rose to 2.28 per cent in August from 2.18 per cent in the same month of 2011.
Total import bill payment in August 2012 stood at $ 2.48 billion as against $ 2.42 billion in August 2011 and $ 2.37 billion in August 2010.
BB data showed that LC settlement in August for petroleum products, rice, sugar, pulses and chemical products were worth $ 403.42 million, $4.4 million, $ 101.44 million, $ 28.67 million and $ 204.86 million respectively as against $ 283.51 million, $ 51.01 million, $ 73.38 million, $ 15.94 million and $ 106.54 million in August 2011.
A BB official said the overall import payment in August had slightly increased, as the government imported huge amount of petroleum products mainly to run its expensive quick rental power plants.
He said the overall import payment might decline in the coming months as the government has taken initiative to jack up its forex reserve.
The central bank faced severe criticism when its reserve fell bellow $ 9 billion in January this year for the first time in three years due to higher import payments.
The official said foreign loans and grants fell drastically in the last few months and the government is also keeping the option of building the Padma bridge with local resources open following cancellation of the loan agreement with the World Bank.
Increased forex reserve is essential to finance the foreign exchange components of the multi-million-dollar project, he added.
The forex reserve crossed $ 11-billion on Wednesday despite payment of 703.98 million to the Asian Clearing Union (ACU) last week.
The opening of LCs in August this year fell by 14.80 per cent as against 4.48 per cent fall in the same in August 2011.
In August this year, LCs worth $ 2.48 billion were opened by the banks compared to $ 2.92 billion in August 2011. The LC opening in August 2010 was worth $ 3.05 billion.