The opening and settlement of letters of credit (LCs) in Bangladesh declined this past December, signaling cooling import demand and a cautious business environment.
New LC openings fell to $6.10 billion in December 2025, a 4.85% drop from the same period the previous year. LC settlements, which represent the actual payment for goods, saw a steeper decline of 6.14%, totaling $5.81 billion.
Early Ramadan Imports Reduce Year-End Pressure Despite the upcoming month of Ramadan, when demand for consumer staples typically spikes, banking officials noted that the usual year-end rush did not materialize. Most major importers completed their purchases for essentials like chickpeas, soybean oil, and dates months ahead of schedule, primarily in September and October.
"The pressure has eased because most Ramadan goods were brought in early," said Syed Mahbubur Rahman, Managing Director of Mutual Trust Bank. "In some cases, like chickpeas, imports have even exceeded current market requirements."
Economic Slowdown and Cautious Sentiment Beyond seasonal factors, the decline reflects a broader stagnation in the private sector.
Subdued Expansion: Sohail R. K. Hussain, Managing Director of Bank Asia, noted that new project expansions are currently slow as businesses adopt a "wait-and-see" approach ahead of upcoming elections.
Low Credit Demand: Private sector credit growth remained under 7% for the sixth consecutive month, hitting 6.58% in November.
Inventory Levels: Large conglomerates—including Meghna, City, and Square Groups—report adequate stock, meaning there is little immediate need for new LCs.
While large-scale investment remains cautious, some bankers expressed optimism that new central bank policies and a stabilizing business environment could trigger a turnaround in the coming months.
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