Relaxed foreign exchange regulation extended

The Bangladesh Bank has extended relaxed foreign exchange regulation facilities till March 31 next year to facilitate foreign trade transactions taking into consideration the ongoing pandemic situation.

In separate circulars issued on Tuesday, the relaxed regulations for refinancing for imports from Export Development Fund (EDF), advance payment against import of life-saving drugs, and usance period in import of industrial raw materials by industrial importers have been extended from existing deadline of September 30 this year.

Referring to the previous circular, the Bangladesh Bank said that given the ongoing situation with Covid-19, it has decided to extend the refinancing facilities from EDF for settlement of back-to-back LCs (Letter of Credit) from 30 September this year up to March 31, 2021.

Earlier on 23 March, the Bangladesh Bank enhanced the advance payment without a repayment guarantee from $ 10,000 to $500,000, considering the pandemic situation.

The facility will expire on 30 September. In a new circular issued on Tuesday, the facility was extended till March 31, next year.

With a view to minimising Covid-19-related import disruptions incurred by industrial importers, the Bangladesh Bank on March 23 allowed usance periods of up to a maximum of 360 days - instead of the current 180 days - depending on the actual needs of their clients.

According to the Bangladesh Bank circular issued on Tuesday, this facility has also been extended till March 31 next year, which already expired on 30 September,.

The central bank has also exempted importers from such restrictions as having to make quarterly payments for their imported goods, by allowing them to pay the total amount at the end of the one-year period.

Regarding the support from EDF, Fazlee Shamim Ehsan, a director of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told The Business Standard that, "Despite the pandemic, the country's export earnings have been returning to normal. The government's timely policy support will work as a major tool in this regard."

He opined that the new move will help to boost the country's export performance in the days ahead.

He also expressed gratitude to the government and the central bank officials for their timely initiatives.  

Abul Kashem Khan, chairman of Business Initiative Leading Development (BUILD), told The Business Standard that, "It is a positive signal from the government. It will help trades during the ongoing pandemic situation. This relaxation will also encourage investors."