 | BB pumps in $57m to help banks pay for import bills
13 March, 2011
The central bank has pumped in US$57 dollars in the money market last week in an effort to help commercial banks pay for soaring import bills of food and essential commodities, a Bangladesh Bank (BB) official said Saturday.
"We'll continue our foreign exchange support to the banks so that they do not face any shortage of dollars in importing essential items including food grains," the BB official told the FE.
He said the central bank has scaled up its foreign exchange support through selling the US dollar directly as well as overdraft (OD) facilities to the banks for settlement of import bills.
The central bank sold US$57 million to the commercial banks last week alone to meet growing demand for the US currency, the BB officials said.
The latest BB dollar injection comes a week after the central bank assured the state-owned commercial banks (SCBs) that they would not face any dearth of dollars to pay for import bills.
The BB took the move after some bankers blamed an acute shortfall of foreign exchange for a double-digit drop in monthly import in February.
Import orders, determined by opening of letters of credit, decreased by over 31 per cent in the month over the previous month while the settlement of LCs, generally known as actual imports, declined by 22.52 per cent.
Opening of fresh letter of credits (LCs) against imports came down to US$2.642 billion in February from $3.842 billion in January.
Import LCs worth $2.426 billion were settled in February, compared to $3.132 billion in January, according to the BB.
Officials said the central bank provided overdraft facilities worth US$30 million to a state-owned commercial bank last Thursday for payment of an import bill for petroleum products.
"We've provided over $700 million as overdraft facilities to the banks, particularly to the state-owned commercial banks since December last year. Of the amount, some $270 million is still outstanding," the BB official said.
He also said the central bank has so far pumped in $699 million directly to the commercial banks to meet the soaring demand for the greenback in the current fiscal year.
Local banks have been facing a severe shortage of dollars since the late last year due to flattening of remittance flow and a spike in import bills for food, cotton, fertilizer, crude oil and oil products.
Release link:http://www.thefinancialexpress-bd.com/more.php?news_id=129049&date=2011-03-13
|
|
|
