FBCCI wants easy LCs, even at expense of reserve dollars

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) yesterday urged the central bank to facilitate opening of letters of credit (LCs) by businesses to import essentials and other items ahead of Ramadan, even if it requires releasing foreign currency from the country's reserves. 

The apex trade body also demanded that the Bangladesh Bank extend an existing relaxed loan repayment policy to June 30 next year from the end of December this year

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It also sought steps for a unified exchange rate instead of the multiple rates that prevail at present.

A team of the federation placed the pleas at a meeting with central bank high-ups at its headquarters.

"The current situation is worse than the pandemic period. We can not bring raw materials for problems in opening LC," FBCCI President Md Jashim Uddin told journalists after the meeting.

"At the same time, we cannot run factories for low pressure of gas. If we can not run factories, import raw material by opening LCs, how can I pay loan instalments?" he asked.

The apex trade body also demanded that the Bangladesh Bank extend an existing relaxed loan repayment policy to June 30 next year from the end of December this year

Banks will become defaulters too if borrowers fail to repay loans. "It is not that we are doing fine financially. So, we want policy support," he said.

Referring to the issue of multiple exchange rates, the FBCCI president said exporters get Tk 101 for each US dollar while they have to count over Tk 105 to buy the greenback to clear import bills for raw materials.

He said backward linkage industries pay Tk 105 per dollar for importing raw materials but they get Tk 101 per dollar when they export their manufactured products.

"That is why we have urged them to make the dollar price unified in both import and export," he added.

The apex trade body also urged the BB to extend the loan repayment tenure of an export development fund to 270 days from 120 days.

Normally when an LC is opened, the respective bank settles it from its own funds, BB Spokesperson Md Mezbaul Haque told journalists.

"We have been noticing for the last few days that remittances are slowly increasing. We are expecting remittances will increase ahead of Eid and dollar supply and the dollar market will increase. It will be possible to gradually pay the due export payments," he said.

"In special cases, we will provide our support when it is necessary," he said.