The Bangladesh Bank on Thursday reduced the letter of credit (LC) margin for importing luxury cars to 50 per cent from the previous 100 per cent and removed LC margin limits for environment-friendly vehicles.
A circular issued by the central bank stated that the new directives will come into effect on February 1.
On July 6, 2022, the Bangladesh Bank had raised LC margins to 100 per cent for luxury car imports to mitigate rising import costs and ease pressure on foreign exchange reserves.
聽The decision has now been revised, setting the minimum LC margin for importing vehicles such as SUVs and MPVs at 50 per cent.
The circular also highlighted the global shift toward energy-efficient and environmentally friendly vehicles, emphasizing the benefits of electric and hybrid cars in reducing carbon emissions and improving air quality in densely populated countries like Bangladesh.
Given such benefits, the central bank has relaxed LC margin requirements for electric and hybrid cars.
Instead, LC limits for these vehicles will now be determined based on the relationship between individual banks and their clients.
