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Despite a modest increase in import orders, Bangladesh's import-bill settlement declined during the first seven months of the current fiscal year, reflecting subdued industrial demand and changing foreign-exchange dynamics.
According to data from the Bangladesh Bank, the country opened letters of credit (LCs) worth $42.78 billion during the July-January period of FY26, marking a 2.41-percent increase from $41.76 billion in the same period of the previous fiscal year.
However, LC settlement - which represents actual payments for imported goods - fell slightly during the period.
Bangladesh settled import payments amounting to $40.03 billion, down by 1.21 per cent from $40.52 billion in the corresponding period of the last fiscal year.
Economists say the divergence between LC openings and settlements indicates that while import orders have increased slightly, actual import payments remain under pressure due to slower industrial activities and cautious business spending.
The imports of key industrial categories continued to show a downward trend.
Notably, the imports of industrial goods, petroleum products, and industrial raw materials declined, suggesting weaker investment and production activities in the manufacturing sector.
But the import of capital machinery has shown some slight uptick, giving an early sign of the revival of economic activities in the coming days.
At the same time, strong remittance inflows have created an unusual situation in the foreign exchange market.
While lower import payments have reduced the demand for US dollars, record remittance inflows have increased the dollar supply.
As a result, the central bank has stepped up its dollar purchases from the market to prevent a sharp fall in the exchange rate.
Officials say the move is intended to maintain exchange rate stability and protect export competitiveness.
Seeking anonymity, a central bank official says the banking regulator keeps purchasing US dollars from banks to prevent possible falls in the exchange rate, which could discourage remitters.
At the same time, he says, the forex market intervention by the regulator helps build reserves significantly to meet future overseas payment obligations in the post-election government regime.
According to data, the central bank has bought some $5.38 billion so far from the market since July 13 last year.
It increased the country's gross foreign currency reserves to $34.86 billion till Monday from $33.18 billion recorded by the end of January.
Director General of the Bangladesh Institute of Bank Management (BIBM) Dr Md Ezazul Islam says the volume of imports is expected to increase from the last quarter of FY26 following the peaceful transition of state power to the elected government.
Hailing the Bangladesh Bank's ongoing forex market intervention, he says it will help the country meet possible future spikes in international payments.
Founding Chairman of Policy Exchange Bangladesh Dr M Masrur Reaz says the rise in import orders of capital machinery indicates a meagre uptick in economic activities in the coming days.
He says the interim government initially announced the election roadmap in August last year. Since then, some businesses may have opened LCs for capital machinery in anticipation of a better business climate after the general elections, which took place on February 12.
"I think it is an early sign of economic rejuvenation," he adds.
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