The central bank Monday assured the state-owned commercial banks (SCBs) of providing adequate foreign currency support for importing essential items, as the country's overall import marked a significantly fall in February.
"We've given the assurance to the SCBs to ensure smooth supply of the essential items, including food grains, in the local market," an executive director of the Bangladesh Bank (BB) told the FE.
He also said the BB's latest move would also help increase foreign currency supply in the market.
The BB has asked the chief executive officers (CEOs) of the SCBs not to avoid opening of fresh letters of credit (LCs) for essential commodities by importers.
"We've advised the CEOs of the SCBs to remain vigil in this connection," the executive director added.
"The overall import situation is still at a satisfactory level," a BB official said, adding that the import dropped slightly in February over that of January due to fewer working days.
He also said insufficient supply of the greenback was also responsible for lower import growth in February.
Opening of LCs against imports, generally known as import orders, decreased by over 31 per cent in the month over January.
On the other hand, the settlement of LCs, generally known as actual imports, also dropped by 22.52 per cent in February, according to the central bank statistics.
Opening of fresh LCs against imports came down to US$2.642 billion in February from $3.842 billion in January. Import LCs worth $2.426 billion were settled in February, compared to $3.132 billion in January, the BB data showed.
Bankers, however, said the import dropped in February mainly due to liquidity crunch of both the US dollar and the local currency in the market.
"Most of the banks, particularly the private commercial banks (PCBs), are facing liquidity shortfall in the recent months due to higher credit growth than deposit," a senior official of a leading PCB told the FE.
Credit growth of all 47 scheduled banks reached 29 per cent on February 3 on an average, while deposit growth stood at 22 per cent, according to the central bank statistics.
The BB has set June 30 as the deadline for bringing down the credit deposit ratio (CDR) of the commercial banks to a reasonable level.
Under the directives, 19 PCBs will have to bring down their CDR to 85, while Shariah-based five Islamic banks to 90, by June 30.
"The imports through the SCBs may increase in March, if the central bank continues providing foreign currency support to them," the PCB official said.
He also said most of the PCBs are rather reluctant to finance in 'unnecessary imports' to align their credit and deposit growth within the BB-set timeframe.
No comments:
Post a Comment