The opening of letters of credit for imports declined to $5.26 billion in November, hitting nine months low due to increased dollar prices and frequent labour unrests in the country.
According to Bangladesh Bank data, LC opening dropped to this level in November compared with that of $6.24 billion in October.
November鈥檚 amount was lowest after February when it was at $5.21 billion.
LC opening declined marginally to $27.97 billion in July-November in FY25 compared with that of $28.1 billion in the same period in FY24, the BB data showed.
Due to the shortage of dollars and increased price hike, businesses might have avoided opening fresh LCs fearing increase in their business costs.
Dollar price has soared to near Tk聽128 on Thursday.
While the official ceiling under the crawling peg system limits dollar transactions to Tk聽120, some banks and exchange houses have been buying dollars at rates ranging from Tk 124 to Tk 126. Therefore, selling rate reached near Tk 128 each.
In July-August, there were business disruptions in the country amid a student-led mass uprising against the authoritarian rule of Awami League government. On August 5, the Sheikh Hasina-led government was ousted.
Bankers said that business activities started recovering at the beginning of September. However, sudden sharp rise in dollars may discourage them to continue imports.
The country has been facing a serious dollar shortage since 2022.
The Bangladesh Bank had provided dollars from its foreign exchange reserves to meet high demand for the government imports, which eventually put tremendous pressure on dollar market.
Businesses have expressed fears that this sudden spike in dollar prices would have a negative impact on the economy.
Bangladesh, like many other countries, has foreign debt denominated in US dollars. As the taka depreciates, it will take more taka to repay the same amount of foreign debts in dollars. It can lead to higher debt repayment obligations for the government and businesses, economists said.
Besides, higher dollar rates mean increased import costs, which, in turn, would raise production expenses and consumer prices. This could worsen the country鈥檚 inflation crisis, affecting purchasing power and overall consumer spending.
Bangladesh鈥檚 gross foreign exchange reserves, according to International Monetary Fund guidelines, reached $19.95 billion on December 18 from $46 billion in December 2021.