Govt to list products to suspend imports amid dollar crisis

The government will prepare a list of products to suspend their imports amid the ongoing dollar crisis in a bid to maintain the foreign currency reserve.

The decision came at a meeting that took place on Sunday with Finance Minister AHM Mustafa Kamal in the chair.

Bangladesh Bank Governor Fazle Kabir, National Board of Revenue Chairman Abu Hena Rahmatul Muneem, Finance Division Senior Secretary Abdur Rouf Talukdar, and Financial Institution Division Secretary Sheikh Mohammad Saleem Ullah were also present at the event.

"Although the government has announced that it will discourage imports of unnecessary items now, it is yet to finalise any list," an official familiar with the matter, seeking anonymity, told The Business Standard.

Government agencies concerned including the Ministry of Industries, the Bangladesh Trade and Tariff Commission, the Ministry of Commerce and the National Board of Revenue would make the list soon, he added.

"We are now analysing the matter [listing products]," said Commerce Secretary Tapon Kanti Ghosh. To learn further on the issue, he advised talking to the NBR.

NBR Chairman Abu Hena Rahmatul Muneem could not be reached over the phone last night after several attempts.

The import costs of the country have been on the rise, not proportionately to the amount of export earnings and remittance, since the beginning of the Russia-Ukraine war in late February this year. Thus, the pressure on foreign exchange reserves increased rapidly.

Currently, the country has some ‍ $42 billion, which would cover import costs for about five months. Amid such a situation, the dollar rate in the kerb market hit an all-time high of Tk104  last week. Although the rate fell slightly the next two days, it increased again to Tk98 on Sunday.

Although the interbank exchange rate of the dollar was set officially at Tk87.50, it was intermarket transacted at Tk97.50.

Due to the dollar crisis, many government and non-government organisations have been failing to open letters of credit as per the demand. To meet the crisis, the Bangladesh Bank has so far released $5.11 billion to the market to keep the dollar market stable.

In addition, LC margins have been increased to control imports of luxury goods, including cars. Foreign tours of officials from government, semi-government and autonomous organisations have been cancelled. The government has even decided to stop the implementation of all the projects which are not urgent now.

In a recent pre-budget talk, Abdur Rauf Talukder said the government would make all-out efforts to maintain its foreign exchange reserves.

"We have started taking a series of steps in this regard," he said.