Not only the dollar crisis, ‘not enough money in the bank’, what awaits?
From consumer goods, imports of industrial parts or fuel are declining. Businessmen and bankers say, not only the dollar crisis; There is not enough money in the banks. Due to this, opening and settlement of import credit has decreased. However, Bangladesh Bank predicts that the situation will improve soon as reserves increase.
While such advance preparation around special occasions offers some comfort, there is still concern in the consumer goods market, which is almost always suffering from supply shortages. Buyers say that they are having a hard time. The price of a product suddenly increases from 10 taka to 20 taka. After a few days when the price comes down, it may be 15 Taka. Thus, the price of everything is gradually increasing.
According to Bangladesh Bank, LC settlement in consumer goods import decreased by 17 and a half percent from July to September this year compared to the same period last year. LC opening also fell from $145.54 million to $133 million.
Meanwhile, the import of machinery required for setting up industries has also decreased. In the last quarter, LC settlements in this sector fell by 25 percent, while LC openings fell by almost half, 41 percent. The rate of opening of LCs in the energy sector is also on the downward trend. But why this situation?
Business leader Abdul Awal Mintu has recently come to lead a bank. He says, mainly due to lack of sufficient money in the bank, import credit cannot be opened as required.
Due to lack of raw materials production is decreasing in many cases. So much megawatt electricity capacity has been built, but still the required gas or electricity is not available on time. Failure to do LC will result in product shortage. All in all, production is declining. It will also increase the price of goods.
Imports of goods also decrease due to reduction in opening or settlement of LCs. Stagnation also came down in the industrial sector. Both have a negative impact on the economy.
Fazle Shamim Ehsan, the executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the apex organization of knit industry owners, said,
Many banks are unable to make payments on time. That’s why many garment factories — who deal with those troubled banks, many of their suppliers are not accepting LCs. As a result, factories are being destroyed for no reason.
Abul Hashem, general secretary of Moulvibazar Traders Association, said that until the supply chain is fixed, there is little chance of the market being stable.
The central bank expects the situation to improve soon as the fall in reserves stops. However, instead of being satisfied with reserves, traders are called to take an active role in increasing imports.
