The country's external trade deficit has widened by 4.69% to $9.59 billion year-on-year in the first four months of the current fiscal year, but this trade gap in October was lower than the previous three months.
Trade deficit increased by $2.04 billion in October compared to the previous month as exports increased while imports did not drop as much.
Bangladesh Bank data shows the deficit – the difference between the country's imports and exports – in September was $3 billion, which was $2.47 billion in August and $2.08 billion in July.
Imports totalled $25.51 billion in the July-October period, which was $23.90 billion in the same period last year. Bangladesh's merchandise exports figured at $15.92 billion, up from $14.74 billion a year ago.
Import payments were $6.16 billion in October, $6.66 billion in September, $6.83 billion in August and $5.86 billion in July.
It means, although the import payment has decreased compared to the previous two months, it has not fallen below $6 billion.
Zahid Hussain, a former lead economist of the World Bank's Dhaka office, told The Business Standard that it seems the steps taken by the central bank to reduce imports are not implemented.
"The central bank has taken a lot of steps which were supposed to bring down imports. Around June-July we heard that banks were reducing opening letters of credit (LCs). The impact of these steps should have been available by now. But it is not visible," he said.
"I heard that there was a positive growth in the readymade garment sector and a negative growth in the non-RMG sector among the exports in October. But the garment sector leaders say that they don't know where the growth in RMG exports came from. This debate was not there before in our country. The same thing happened in November," he added.
The economist said the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said their members' export growth was not much, but the data shows a lot of growth in exports.
"I think the trade deficit figure would have been bigger if this dispute had been resolved," he added.
He emphasised making the statistics more accurate.
Usually, the Bangladesh Bank publishes the import data one month after the Export Promotion Bureau (EPB) publishes the country's export data for that month.
According to the EPB report published on 1 December, for the first time in history, Bangladesh's monthly export earnings crossed the $5 billion mark to stand at $5.09b in November.
The trade deficit will be known after the November import data is available next month, however, according to economists, import payments may also come down slightly owing to a decline in the number of LC openings and an opportunity of deferring payments.
Towfiqul Islam Khan, a research fellow at the Centre for Policy Dialogue (CPD), said, "The dollar rate should be market-based. There is no need to discriminate in dollar rates of exports, imports or remittances. One of the reasons for the imbalance in imports and exports is the different rates of the dollar."
Although the monthly remittance inflows were around $2 billion in July and August, in the last three months till November, the figure stood at nearly $1.5 billion, which has impacted the current account balance, economists said.
The current account deficit rose to $4.50 billion in the July-October quarter this year in contrast to last year's $3.83 billion.
Zahid Hussain said, "It is normal for a developing country like ours to have a current account deficit. The deficit is not a problem as long as it is financed. But, the financing of the current account deficit is not adequate."
"As a result, it is putting pressure on reserves. The central bank is constantly selling dollars from the reserves to reduce the depreciation of the exchange rate, so the reserves are also depleting," he added.
The country's reserves stood at $33.98 billion at the end of Tuesday, the central bank said. This reserve rose to $48.06 billion in August last year.
The noted economist said, "Usually, our financial account remains in surplus. A large part of the current account deficit is covered by a financial account surplus. Now both have gone into deficit."
According to the central bank data, the financial account surplus was $2.79 billion during the July-October period of the last financial year. It is in a deficit of $37 million during the same period of the current fiscal year.
Treasury heads of several private banks say most banks are in a dollar crisis. Now, they have reduced LC opening. State-owned banks are buying dollars from the central bank only to make government import payments.
Most banks are inclined to preserve dollars as opposed to opening import LCs, they added.