BB eases advance import payment rules to simplify transactions

Business Report :

Bangladesh Bank (BB) has doubled the limits for advance payments against imports in a move to further simplify trade transactions.

“To further simplify trade transactions, it has been decided to enhance the aforesaid limits to US$20,000 and US$50,000 respectively,” said a BB circular issued on Tuesday.
The policy update is seen as part of broader efforts to boost trade efficiency and simplify global transactions in the face of ongoing global economic challenges.

Previously, the central bank allowed advance payment of up to $10,000 or equivalent without a repayment guarantee. In addition, an advance payment of up to $25,000 was permissible from Exporters’ Retention Quota (ERQ) accounts.

ERQ allows Bangladeshi exporters to keep a portion of their foreign earnings in a foreign currency account, which they can use for business expenses abroad.

The central bank said all other instructions in this regard shall remain unchanged.
Industry insiders welcomed the decision, saying it would be particularly helpful for small and medium-sized importers.

They also described the move as a timely step in line with the growing demand for flexible trade policies.
Earlier on Monday, importers in a meeting with the central bank at its headquarters requested policy support to ease imports, while assuring the central bank governor that they would work to keep prices stable.

Bangladesh Bank Governor Ahsan H Mansur presided over the meeting, which was attended by top officials and representatives of Meghna Group, City Group, TK Group, ACI Group, Bashundhara Group, Nabil Group, and Pran-RFL, among others.

Bangladesh Bank Governor Ahsan H Mansur assured the country’s top business groups of adequate dollar support for opening import letters of credit (LCs), and urged them to ensure an adequate supply of essential commodities in the market to keep prices stable.
The governor informed businesses that there are no restrictions on imports, and banks now have sufficient dollars.

Businesses can import as per their demand. However, LC bills must be settled on time. Any delay creates pressure on banks and can also harm the country’s credit rating with foreign banks, he said at the meeting.
Correspondingly, the importers assured the governor that they would keep the prices of essential commodities stable.
Inflation last month eased slightly to 8.29 percent from 8.55 percent in July, according to Bangladesh Bureau of Statistics data. However, inflation remained above 9 percent for more than two years.