LC openings rise amid dollar stability, settlements face hurdles

Import activity in Bangladesh showed signs of a modest recovery in the first five months of the current fiscal year (FY26), supported by a stable dollar market and preparations for Ramadan.

However, the recovery remains fragile as businesses adopt a cautious ‘wait-and-see’ approach ahead of the national election.

According to Bangladesh Bank data, Letters of Credit (LC) openings increased by 4.5 percent to $29.69 billion during July–November of FY26, up from $28.4 billion in the same period last year.

The data highlights a gap between LC openings and final payments with high interest rates and political uncertainty slowing settlements.

LC openings surged 32.22 percent to $911 million, reflecting renewed investments in energy-efficient equipment but settlements fell 16.77 percent to $745.5 million.

Ahead of Ramadan, LC openings rose 10.64 percent to $2.85 billion while settlements slightly declined to $2.41 billion, according the data.

Besides, openings increased marginally by 0.42 percent to $10.29 billion, indicating cautious production due to weak domestic demand and limited working capital.

Despite a stable interbank exchange rate at Tk 122 per dollar over the past nine months, high rates have raised import costs and debt servicing burdens.

Overall LC settlements dropped slightly by 0.63 percent to $27.94 billion during the July–November period.