The Bangladesh Bank has imposed a 100% cash margin for opening letters of credit (LCs) on cars, electronics, gold, precious metals, RMG, and pearls, among other items, to discourage imports in a bid to keep the country's currency and debt management more integrated and stable.
A central bank circular issued and sent to all offices on Monday, also instructed all banks to refrain from giving credits to importers to meet the margins.
It says the decision comes against the backdrop of the long-term negative effects of Covid-19 and, more recently, the Russia-Ukraine War, which has led to a more unstable global economy already rocked by the pandemic.
The move aims to further strengthen the country's monetary and debt management amid times of such volatility, said the circular.
The other products that fall under the central bank's latest directives are leather products, jute products, cosmetics, furniture and decorative items, fruits and flowers, non-grain food products, processed foods and beverages.
Meanwhile, for baby food, essential food products, fuel, life-saving drugs and medical equipment recognised by the Directorate General of Health Services, directly imported capital equipment and raw materials for local manufacturing and export-oriented industries, essential commodities for use in government priority projects, there is no LC margin. Howvever, the margin has been set at a minimum of 75% for importing other products.