Bangladesh Bank has increased the ceiling for advance payments against imports in a bid to further ease trade transactions and support businesses.

As per a circular issued Tuesday by the central bank’s Foreign Exchange Policy Department (FEPD), importers can now make advance payments up to USD 20,000 or equivalent without a repayment guarantee. Earlier, the limit was USD 10,000.

Similarly, advance payments from Exporters’ Retention Quota (ERQ) accounts have been raised to USD 50,000 from USD 25,000.

All other instructions in this regard shall remain unchanged, the circular noted.

The directive, signed by Harun-Ar-Rashid, Director of FEPD, instructed banks to bring the enhanced payment limits to the notice of their clients.

Industry insiders welcomed the decision, saying it would be particularly helpful for small and medium-sized importers who often face difficulties in arranging timely payments to foreign suppliers.

The move comes at a time when the central bank is under pressure to balance foreign currency reserves with the country’s import needs. On Monday, Bangladesh Bank held a meeting with leading importers to discuss ways to stabilise the prices of essential commodities amid persistently high inflation.

During the meeting, importers sought policy support to ease import procedures and ensure uninterrupted supply of essentials. In response, they assured the central bank governor that they would cooperate in keeping market prices stable.

By raising the advance payment ceiling, Bangladesh Bank expects to facilitate smoother trade settlements while reducing bottlenecks in import financing.