Bangladesh Textile Industry Seeks Higher Limits Of LC’s

Textile mills in Bangladesh have urged the central bank of Bangladesh to raise the limit of letters of credit (LCs) so that they can import more raw materials.

The Bangladesh Textile Mills Association (BTMA) sent a letter to Bangladesh Bank requesting for a hike in LC limit last week, in which the trade body also requested for a higher limit for single borrowers.

“The textile industry is going through a critical juncture due to global economic slowdown, a volatile dollar as well as political uncertainty,” Mohammad Ali Khokon, President, BTMA said in the letter.

He also added that the crisis was heightened by hike in raw material and duel prices and that this situation has arisen at a time when sector is still recovering from the pandemic and ongoing wars.

“Many textile mills are managing without generating profits while many others are incurring losses and at the same time, minimum wage of workers has been raised by 50 percent,” Khokhon added.

“The Taka has been devalued by almost 40 percent in the last two years, due to which, the limit of textile mills to open LC’s has reduced and so now, are struggling to import enough raw materials,”he stated.

BTMA also requested an equal conversion price of dollars for exporters as well as remitters or else have a market based rate for the dollar.

Bangladesh textile mills also sought extension of the repayment period of the stimulus package that was given during the Corona Virus pandemic.