Bangladesh Bank Sets 270-Day Raw Material Usance

In a significant move to bolster the industrial sector and streamline trade operations, Bangladesh Bank (BB) has announced that the usance period for imports of industrial raw materials will be set at 270 days. This revised policy will come into effect from 1 January 2026.

According to a circular issued by the Foreign Exchange Policy Department of BB on 29 December 2025, the extended usance period will apply to a range of imports including raw materials, back-to-back Letters of Credit (LCs), agricultural machinery, and chemical fertilisers. The facility will be available to buyers under approved dealers’ credit arrangements.

The circular further specifies: “The 270-day period or the applicable cash conversion cycle, whichever is shorter, shall apply.” This represents a notable adjustment from the previous provisional limit of 360 days, which was set to expire on 31 December 2025.

Senior officials of Bangladesh Bank explained that the revised 270-day term is intended to provide sufficient cash flow for industrial importers while maintaining a cautious balance in the nation’s foreign currency reserves. Banks and approved dealers have been instructed to evaluate applicants’ prior transactions and business practices when granting usance facilities.

For back-to-back LCs, the usance period will be determined in accordance with rules governing export proceeds remittance. It is important to note that imports financed through the Export Development Fund (EDF) are excluded from this facility.

During 2025, BB implemented several temporary policy adjustments, notably increasing the usance period from 180 days to 360 days under FE Circular No. 08 and FE Circular Letter No. 27. However, given the current stability in the US dollar market and the sufficient foreign currency reserves held by the central bank, the extended 360-day term is no longer deemed necessary.

Economists have welcomed the revised policy, noting that it will support industrial growth while ensuring prudent management of the country’s foreign currency reserves, reflecting a balanced approach to economic governance.

Summary of Usance Policy Changes

The 270-day usance policy underscores Bangladesh Bank’s commitment to industrial development and prudent foreign currency management, ensuring a well-regulated and efficient trade environment for the nation.