STAR BUSINESS REPORT

The Bangladesh Bank (BB) has instructed banks to keep the cash margin rate at the minimum level when opening letters of credit (LCs) for importing essential commodities ahead of the upcoming Ramadan.

The move aims to ensure adequate supply and price stability in the local market.

In a notice issued yesterday, the central bank said the relaxed LC margin facility will remain in effect until March 31, 2026. Ramadan is expected to start just after mid-February next year.

The commodities covered under this facility include rice, wheat, onion, lentils, edible oil, sugar, chickpeas, peas, spices, and dates -- items that typically see heightened demand during the month of fasting.

Under the directive, banks have been allowed to set the LC margin at their discretion based on the banker‑customer relationship, instead of maintaining a fixed percentage.

Earlier, in September 2024, the central bank had made it mandatory to maintain a 100 percent cash margin for LCs against imports of certain products.

Later, in November 2024, it temporarily allowed banks to lower the margin for essential imports until March 31, 2025, to ease Ramadan‑related imports.

The BB said the latest instruction has been issued with the objective of keeping essential goods affordable and maintaining adequate domestic supply.