Economists and bankers say the country’s economy is starting to recover with a fall in Letter of Credit (LC) openings and modest increases in foreign currency reserves after tightening the grip on unusually high imports.

Recently, the country’s imports skyrocketed following signs of economic recovery from the Corona crisis, as well as high import payments due to global energy and food price spirals.

However, different initiatives taken by the government and central bank have helped contain the soaring imports.

Foreign exchange reserves fell to $33.86 billion on November 30, but have now risen to $34 billion.

From $8.17 billion in November last year, LC openings have halved to $4.02 billion in November this year.

This year’s LC opening peaked at $9.8 billion in March, then declined to $8.42 billion in April, then fell to $7.28 before rising to $8.49 billion.

LC opening was $6.39 billion in July, $6.62 billion in August and $6.51 billion in September and then drastically dropped to $4.74 billion in October and to $4.02 billion in November.

During the July-November period, the total amount of LC openings dropped by 16.10 percent to $28.28 billion from $33.71 billion a year earlier.

Analysts believe that this development is beneficial for the economy in light of the current domestic and global economic situations. They said it was extremely important for the economy since it would assist in stabilizing the foreign exchange market.

“It may take a few months for the effects of the declining trend in LC Opening to start showing up. Import bills will begin to come down further in early 2023,” said Selim RF Hossain, chairman of the Association of Bankers Bangladesh (ABB).

Bangladesh Bank Governor Abdur Rouf Talukder informed bankers at a meeting that LC opening for unnecessary goods had been halted. However, banks had been instructed to open LCs for essential food items without restriction ahead of Ramadan.

However, LC settlement increased by 19.05 percent to $33.54 billion during the first five months of the year despite a decline in LC openings. LC settlement totaled $27.15 billion.