Strong remittance inflows and export revenue drove Bangladesh’s import letters of credit (LCs) to open and settle in March, surpassing the US $ 6 billion mark. This was a notable rise over the same month the previous year.
Export LCs of US $ 6.46 billion were created in March, according to data from the Bangladesh Bank. This represents a 6.25 percent increase over the US $6.08 billion opened in March of FY ’24. One noteworthy development is that import LC openings have exceeded US $ 6 billion per month for the first three months of the current fiscal year.
A central bank policy official attributed this surge to the availability of higher US dollar reserves in banks, primarily due to increased remittance inflows and export proceeds.
Bangladesh experienced its highest-ever monthly remittance inflow in March, receiving US $ 3.29 billion, the highest figure in the country’s history. Overall, from July to March of FY ’25, remittance inflows totaled US $ 21.78 billion, a 27.6 per cent increase over the US $ 17.07 billion received during the same period last year.
On the export front, Bangladesh’s earnings reached US $ 37.19 billion during July-March, reflecting a 10.63 per cent growth compared to US $ 33.61 billion in the same period of the previous fiscal year. The positive trend is attributed to steady demand in key sectors and the festive season, which traditionally boosts imports of essential goods ahead of Eid festivals and Pahela Baishakh (Bangla New Year).
Mohammad Ali, Managing Director and CEO of Pubali Bank, explained that the country’s large consumer base and sustained demand have necessitated continued imports.
Official figures show that back-to-back LC openings rose approximately 13.41 per cent during July-March, totaling US $ 8.44 billion, up from US $ 7.44 billion during the same period last year. Ali noted that the increased US dollar reserves are encouraging banks to open more free-limit LCs and that the growth in exports has further contributed to this trend.
Despite the overall growth in LC openings, capital machinery imports have declined sharply by 26 per cent during the same period, indicating a slowdown in new investments. Ali highlighted that fewer clients are seeking to open LCs for capital machinery, which could have long-term implications for industrial expansion and employment generation.
On the settlement side, March saw a 14.83 per cent year-on-year increase in LC settlements, with US $ 6.35 billion paid compared to US $ 5.53 billion in March of last year. For the first nine months of FY25, total import LC settlements reached US $ 52.34 billion, up from US $ 49.72 billion in the same period last year.
Industry experts point out that the healthy inflow of remittances and export earnings has eased payment pressures on banks and improved dollar liquidity.
