Bangladesh Bank (BB) has toughened import of luxury and nonessential items by making costlier provisions which include hiking Letter of Credit (LC) margins to 100 percent.
The central bank issued a circular on Wednesday also widening the list of items under high import LOC margin.
Luxurious items include Sedan car, Sport Utility Vehicle (SUV) and multi-purpose vehicle.
The BB came up with the move to raise import costs and check pressure on the forex reserves.
In a major twist, the central bank has shifted from its previous (May 2022) posture of setting LC margin at 75 percent for import of luxury and 50 percent for nonessential items.
The 100 percent LC margin is applicable for luxurious cars, cosmetic items, gold ornaments, RMG products, household electrical appliances, beverages, furniture, jute and leather goods, fruits and flowers, alcohol, tobacco leaves, and a number of other products.
As per the new provision, importers will have to deposit the full import prices with banks.
The BB imposed 75 percent LC margin for import of all other products. However, baby and essential food, lifesaving drugs and medical accessories, capital machinery, raw materials of productive and export industries, agricultural items, and essential products for the government’s priority projects are exempted from the tough provision.