Dhaka, Bangladesh – Spice trader Mohammed Enayet Ullah has made at least four attempts since November to open a letter of credit to pay for imports of cumin, cardamom and cloves, some of the most essential spices used in Bangladeshi cooking, only to be refused by banks due to a shortage of dollars.
Importers in Bangladesh need to open letters of credit with one of the country’s 61 scheduled banks to buy foreign goods and services. It is essentially a financial contract issued by an importer’s bank that guarantees payment to the seller in dollars. In case a buyer doesn’t pay up, the bank has to take on the liabilities.
