Additional time granted to Exporters for bringing home export proceedsadmin2019
According to the authority, The Central Bank of Bangladesh is willing to give a proposal by offering Exporters 210 days to repatriate proceeds from exported products. The initial purpose of this proposal is to make better competitiveness of Bangladeshi products in foreign markets, however, it’ll raise the foreign currency reserve.
To lower the burden on the forex reserve, the authority is giving the offer cash incentives to remittances by Bangladeshi peacekeepers serving UN missions and prolonging 360 days usance period for imports for an additional six months. However, the central bank is going to provide three circulars on this matter.
The exclusive president of the association confirmed that Foreign buyers are requesting to extend the time limit from the usual time limit which was 90 to 120 days in order to clear the payments for any apparel products. He also added that export orders have fallen by almost 30%. The export picture may worsen more if we do not extend the payment deadline.
Bangladeshi Knitwear Manufactures and Exporters Association’s request was the main reason, behind the decision of Bangladesh Bank on the matter of extending the proceeds repatriation time. However, in January, the central bank extend the usance period from 180 days to 270 and also in July the extension was 360 days. A worse impact on the reserve will continue if importers are not allowed to pay for the letter of credit after one year to the comments of Central Bank officials. Bangladesh Bank explained that the foreign exchange of Bangladesh is $34.3 billion and if the exclusion is done by Export Development on the matter of loans given to Srilanka, the amount will be $26.3 billion and about $1.5 billion in selling from the forex reserve by the central bank in addition to meet the trade deficit.
It will be the best decision to extend the time limit for export proceeds because by this process more export proceeds can be secured. However, there are some advantages and disadvantages. A concern arise from the official of the central bank, he told that by this matter of extending time decision, it’ll deduct the capacity of bargaining. This statement was disagreed with by Mohammad Hatem. He countered this statement and added that we will import raw materials from suppliers after taking consent from the supplier who will not disagree to receive the payments after 360 days.
Expatriates working abroad receive 2.5% cash incentives for domestic money transfers. TK 107 for every dollar, they are receiving through an official banking channel during sending money. However, those who are at the UN peacekeeping missions and Bangladeshi, are not receiving any incentives. The central bank will help them by providing the same incentives.
Picture and Article Source: The Business Standard