Remittance inflows from Maldives down 53% in FY22

Remittance earnings from the Maldives declined by 53 per cent to $21.59 million in FY22 from $46.03 million in FY21, the Bangladesh Bank data shows.

Sources at the central bank said the fall was caused by the US dollar crisis while the island country not following internationally recognised methods of sending remittances was another reason.

The Maldives is among the top 30 remittance sources for Bangladesh. It pays foreign workers in local currency, but the country’s exchange houses do not accept rufiyaa for sending remittances.

As a result, Bangladeshi workers have to buy US dollars to remit, which their families then convert to taka. This two-step conversion is negatively impacting remittances.

Besides, the Maldives is facing a dollar crisis like Bangladesh, with the cost of buying the American currency increasing for expatriates. Due to these reasons, the flow of remittances from the South Asian nation via official channels has drastically decreased.

Serajul Islam, spokesperson and executive director of the Bangladesh Bank, told The Business Post Bangladesh’s overall remittances coming down by 15 per cent in FY22 year-on-year had had an effect. He said the Maldivian exchange houses not accepting the local currency for sending remittances was another problem.

Sources said the Bangladesh Bank had written to the central bank of the Maldives in January this year, requesting it to take steps for resolving the issues.

The Maldivian central bank was urged to introduce a system so that exchange houses would accept the local currency for remittances as per international standards. A delegation of the Bangladesh Bank also expressed interest in visiting the country.

However, the Maldivian central bank replied in a letter in March that it was not possible to follow international procedures at the moment. The Bangladesh Bank then decided to cancel the visit.

Serajul said, “We are thinking about how to help the Bangladeshis living in the Maldives send remittances easily.” But he could not mention any specific initiatives.

Sri Lanka’s Bank of Ceylon and Habib Bank of Pakistan have branches in the Maldives. That is why the citizens of these countries living there do not face the problems that Bangladeshi expats do.

Bangladesh’s National Bank has a branch in the Maldives, but its operation has not started yet. Another bank recently expressed interest in opening a branch there, said sources at the central bank.

The Maldivian central bank’s FY21 annual report said Bangladesh continued to be the top remittance destination, representing 45 per cent of all outward remittances, followed by India with 11 per cent and Egypt with 6 per cent.

There is no official data on the number of Bangladeshi migrants living in the Maldives. The Maldivian media reported 1.1 lakh Bangladeshis were living there in 2019 and most of them were illegal migrants.