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Foreign trade transactions

BB extends deadline for policy support

Published : 06 Jan 2022 10:23 PM

Bangladesh Bank has extended the deadline for policy assistance in foreign trade transactions for traders to ease foreign trade and help revive economic activities.

Policy support for foreign trade will be available until June 2022. The facility was supposed to expire on December 31 last year.

As part of the policy support, under the Suppliers and Buyers Credit, back-to-back imports of industrial raw materials, exports, agricultural inputs and chemical fertilizers can be repaid in 270 days instead of 180 days.

On Thursday, Bangladesh Bank has issued a circular in this regard from the Foreign Exchange Policy Department.

In view of the current situation, the duration of this policy assistance has been extended, said the concerned officials of the Central Bank.

As per the guidelines, the Export Development Fund (EDF) loan is limited for member factories of Bangladesh Garments Manufacturers and Exporters Association (BGMEA) and Bangladesh Textile Mills Association (BTMA), the garment sector organizations . 

Businessmen in the sector said the policy assistance provided by Bangladesh Bank will ease foreign trade and help revive economic activities.

Earlier on Tuesday, the leaders of the garment sector organization held a meeting with Bangladesh Bank on the current situation. The meeting was chaired by Central Bank Governor Fazle Kabir.

BGMEA President Faruk Hasan, BKMEA President Selim Osman and Bangladesh Bank Executive Director Humayun Kabir were present on the occasion. At the meeting, the business entrepreneurs made several proposals including raising the limit of EDF loans.

It was informed at the meeting that the decision will be informed after reviewing the issues from Bangladesh Bank.

Under the back-to-back LC, members of a number of exporting organizations, including BGMEA, BTMA, BKMES, the apex organization of readymade garment owners, get loans from EDF to increase raw material import facilities. 

The size of the fund has recently been increased to $5.5 billion. The size of the EDF has increased by about $2 billion in the last year. At present, exporters are getting loans from this fund at 2 percent interest.