Banks opened import LCs worth $5.68 billion in April—down from $6.13 billion in March, but higher than the $4.73 billion in February, central bank data show. April's figure is 20 per cent higher year on year (YoY).
The need for raw materials falls as production at factories stops. Hence, the tendency to open import LCs declines during Ramadan months.
The central bank has, however, implemented several measures over the last one and a half years to reduce imports, including maintaining import LC margins at cent per cent and discouraging the import of luxury goods.
This has resulted in an improvement in the trade and current account balances in the country's balance of payments.
The financial account deficit is, however, worsening due to rising pressures from government and private debt repayments and trade credit, domestic media outlets reported.
ALCHEMPro News Desk (DS)
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