Bangladesh sees lowest openings of import LCs in 58 months in Jun 2025
Import LC settlements also significantly dropped, reaching the lowest level in nearly four and a half years. Such settlements totalled $4.59 billion in June—down by 14 per cent YoY.
June's LC opening volumes were even lower than those during the COVID-19 pandemic—a wake-up call for any import-dependent economy, bankers and economists caution.
Bangladesh saw its lowest monthly import letter of credit (LC) openings in 58 months this June, with such openings dropping by 24.42 per cent YoY to $4.14 billion. Import LC settlements also reached the lowest level in nearly four and a half years, totalling $4.59 billionâ€'down by 14 per cent YoY. LC openings steadily fell throughout FY25 second half due to a sustained slowdown in private investment.
LC openings steadily declined throughout the second half of fiscal 2024-25 (FY25), bottoming out in June, domestic media outlets reported.
The last time LC openings dropped below this level was in August 2020, when they stood at $3.7 billion. The last time monthly LC settlements were lower was in November 2020, during the pandemic's peak, when they stood at $4.41 billion.
The sharp decline is being attributed to a sustained slowdown in private investment.
Total imports in FY25 (July-June) stood at around $69 billion, up by just 0.18 per cent YoY. However, the growth was not across the board.
Import LCs for capital machinery, essential for investment, fell by over 25 per cent YoY, while those for intermediate goods, petroleum and industrial raw materials also declined over the same period—an indication of weakening economic momentum.
However, on a fiscal basis, LC settlements have increased. In FY25, Bangladesh settled $69.46 billion in import LCs—up by 4.18 per cent YoY.
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