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Bangladesh's overall imports jumped by nearly 50 per cent in the first nine months of this fiscal year (FY '22) following higher imports of fuel oils and industrial raw materials, officials said.
The settlement of letters of credit (LCs), generally known as actual import, in terms of value, rose by 49.64 per cent or US $20.09 billion to $60.57 billion during the July-March period of fiscal year 2021-22, from $40.48 billion in the same period of the previous fiscal, according to the central bank's latest statistics.
On the other hand, opening of LCs, generally known as import orders, increased by more than 46 per cent or $21.55 billion to $68.36 billion during the period under review from $46.81 billion in the same period of FY '21.
"Our import expenses increased significantly as a fresh hike of essential commodities including fuel oil prices in the global market mainly due to the ongoing Russia-Ukraine war," a senior official of the Bangladesh Bank (BB) told the FE on Saturday.
But the import-payment pressure on the economy is likely to ease in the coming months as the central bank has already imposed margin on letter of credit (LC) for all imports, save some essentials, the central banker explained.
Earlier on April 11 last, the central bank imposed minimum 25-per cent cash LC margin on all imports excepting some essential items, aiming to ease import-payment pressure on the economy.
Besides, the depreciating mode of the Bangladesh Taka (BDT) against the US dollar will help discourage the import of non-essential items in the near future, according to the central banker.
The local currency depreciated by 45 poisha against the greenback in the inter-bank foreign exchange (forex) market from March 21 to April 26, mainly due to higher demand for the US currency to settle import payment obligations.
The US dollar was quoted at Tk 86.45 each in the forex market on April 26 against Tk 86.00 on March 21. It also remained unchanged at Tk 86.45 on Thursday (May 5).
Actually, the country's import payment obligations have increased significantly in recent months as the overall economic activities are fully resuming after more than one-year of sluggishness, mainly caused by the Covid-19 pandemic.
Import of petroleum products rose by 87.12 per cent to $5.46 billion during the period under review from $2.92 billion in the same period of FY'21.
Talking to the FE, a senior official of the state-run Bangladesh Petroleum Corporation (BPC) said import expense for petroleum products increased significantly in recent months following an upturn in both price and quantity.
He also predicts that the existing trend in import-payment obligation for fuel oils may continue until May mainly due to seasonal impact.
"Import expense for petroleum products is likely to cross $7.0 billion-mark by the end of this fiscal year," the BPC official noted.
Meanwhile, import of industrial raw materials jumped by nearly 54 per cent to $22.13 billion during the July-March period of FY'22 from $14.39 billion in the same period of the previous fiscal year.
However, the import of capital machinery or industrial equipment used for productions jumped by over 42 per cent to $3.81 billion during the period under review from $2.68 billion in the same of FY'21, the BB data showed.
The imports of capital machinery for readymade garment (RMG), leather, pharmaceuticals and electronics sectors have increased significantly during the period under review, according to market insiders.
Import of intermediate goods such as coal, hard coke, clinker and scrap vessels etc, surged by more than 50 per cent to $5.35 billion during the period under review from $3.55 billion in the same period of FY '21.
"Usually, construction materials, imported as intermediate goods, pushed up the overall import payments in the first nine months of FY'22," another BB official told the FE.
He also said different mega infrastructure projects, including Padma Bridge, Rooppur Nuclear Power Plant and metro-rail, consumed the lion share of intermediate goods.
However, import of consumer goods also jumped by more than 41 per cent to $6.86 billion during the period under review from $4.85 billion in the same period of FY '21, the BB data showed.
Among the consumer items, the import of edible oils covering both crude and refined jumped by nearly 34 per cent to $1.37 billion during the July-March period of FY'22 from $1.02 billion in the same period of the previous fiscal year while the import of wheat rose by 33.45 per cent to $1.45 billion from $1.08 billion.