BB extends policy support to exporters until December

The central bank has extended the tenure of its different policy supports to export trade by six more months amid the ongoing Covid-19 pandemic, officials said.

The exporters will now enjoy the facilities until December 31 this year, according to a notification issued by Bangladesh Bank (BB) on Monday. The existing supports were scheduled to expire on June 30.

The central bank's latest announcement came just one day after a meeting of BGMEA delegation, led by its president Faruque Hassan, with BB governor Fazle Kabir in Dhaka.

A senior official of the Bangladesh Bank (BB) said the central bank has extended its policy support further to give some extra comfort to the exporters.

"We've extended our policy supports further considering the second wave of the Covid-19 pandemic," the central banker explained.

Such policy supports will help the exporters offset the adverse impact of the ongoing pandemic on their businesses, the BB official added.

Under the policy supports, the time for repatriation of export proceeds is extendable up to 210 days from the date of shipment instead of 120 days earlier.

The back to back letters of credit (LCs) opened under supplier's or buyer's credit are extendable to 180 days more within the permissible rate of interest.

This facility will be available on bonafide grounds necessitating the extended period to settle import payments, according to the BB officials.Loan from the Export Development Fund (EDF) is extendable to an additional 180 days instead of 90 days.

Refinancing from the EDF up to 180 days is allowable in case of justifiable grounds required for settlement of import payments against back to back LCs opened under supplier's/buyer's credit.

Besides, EDF loan to member mills of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA) will be US$ 30 million, instead of $25 million earlier, for disbursement during this period for input procurement, the notification added.

Mohammad Ali Khokon, president of the BTMA, welcomed the BB's latest move, saying that it would help boost the country's overall export earnings further in the near future despite the ongoing pandemic.

"The demand for funds of apparel and clothing exporters has increased significantly following recent high prices of raw materials in the global market," Mr Khokon, managing director of Metro Spinning Limited, said while explaining the necessity of the policy supports.

Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the policy supports would help adjust payment delays by buyers because of the ongoing Covid-19 pandemic.

"Actually, payment mode from the buyers' side has already been changed mainly due to the pandemic," Mr Hoque, managing director of Plummy Fashions, noted.

He also said extension of such policy supports will help ease businesses in the apparel and clothing sector of Bangladesh.