B’desh asks banks to relax LC margin rate for essential food items

Dhaka: In the wake of soaring inflation, the central bank of Bangladesh has instructed all the commercial banks in the country to relax the opening margin rate for the settlement of Letters of Credit (LC) against eight food items.

Bangladesh Bank said on Sunday in a circular that the instruction is aimed at keeping the prices of the food items within reach of consumers during the upcoming Islamic holy month of Ramadan, Xinhua news agency reported.

The items are edible oil, sugar, chickpeas, pulses, beans, onions, dates and spices.

The bank also fixed the opening margin rate for the settlement of letters of credit at 75 per cent in a bid to limit imports to save the depleting reserves of foreign currency.

The bank said keeping the LC margin at the lowest level for the products would slow down the rise in food prices and help ease retail inflation during Ramadan.

Bangladesh’s inflation decreased to 8.85 per cent in November from 8.91 per cent in October.

The country’s inflation drifted lower in November, October and September after surging to a more than 10-year high of 9.52 per cent in August.