In the face of multifaceted economic challenges, Bangladesh experienced a notable 18.19% year-on-year decline in imports, totaling $33.68 billion during the first half of the 2023-24 fiscal year, according to recent Bangladesh Bank (BB) statistics. The settlement of letters of credit (LCs), indicating actual imports, stood at $33,683.51 million in July-December, compared to $41,175.28 million in the corresponding period the previous year. Concurrently, overall import orders, officially termed as the fresh opening of import letters of credit, recorded a 5.33% year-on-year drop to $32,929.31 million in the same period.
The data revealed a strategic effort by Bangladesh to address economic challenges and boost forex reserves, currently around $20 billion. The central bank has implemented policies to discourage imports, aiming to alleviate the trade deficit and enhance forex reserves. In the 2022-23 fiscal year, Bangladesh’s trade deficit decreased by 48.41% year-on-year to $17.16 billion amid reduced imports and shrinking forex reserves.
In response to the economic landscape, the central bank has issued strategic directives in its half-yearly monetary policy, spanning from January to June 2024. The primary focus is on maintaining a vigilant, hawkish approach to monetary policy until inflation rates are effectively brought under control. To address demand-side pressures and ensure adequate funds for priority sectors, the BB has increased its policy rate by 25 basis points to 8%. This marks the ninth consecutive rate hike over the past 20 months, aligning with efforts to manage inflation, which was at 9.93% in October, surpassing the central bank’s target of 6% for the current fiscal year.
