The central bank today instructed banks to keep the margin on the opening of letters of credits to import essential commodities at the lowest level to meet the growing demand of the products during Ramadan.
Keeping the LC margin at a minimum level will help retain the price of the items at a tolerable level during the fasting month, according to a central bank notice.
The central bank instructed banks to keep the LC margin at the lowest level for some products such as edible oil, gram, pulses, onion, spices, dates, fruits and sugar.
The order came into effect immediately and would remain in force until May 15 this year.
The central bank does not set any margin on the import of commodities, and it is usually determined based on the bank-client relationship. Banks can even decide to impose no margins.
Despite that, the central bank has given the instruction on the occasion of Ramadan, which starts in the middle of next month, as a section of unscrupulous businesses usually try to cash in on the higher demand and increase the price of the commodities.
"The central bank notice will help commodity importers bring in the products smoothly," a central banker said.