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Remittance earnings from countries where most expatriate Bangladeshis work have fallen in recent months despite increasing migration of workers indicating a growth of the illegal ‘hundi system’.
During the first quarter of this fiscal year, the remittance earnings fell highest by 41.65 per cent from Oman, 23.40 per cent from Saudi Arabia, 19.31 per cent from Singapore, 11.63 per cent from Bahrain, 8.77 per cent from Kuwait and 1.18 per cent from Qatar, as per the latest data from the Bangladesh Bank.
The remittance inflow, however, rose highest by 76.59 per cent from the United Arab Emirates, 16.50 per cent from the USA, 12.53 per cent from the UK and 11.66 per cent from Malaysia during the mentioned period.
The highest remittance inflow at $1 billion came from the USA and the lowest $90 million came from Singapore during the period among the top ten remittance-sending countries.
Industry insiders said that the rising migration of Bangladeshi workers left no impact on the falling trend of remittance inflow because of the workers’ preference for the hundi system, an illegal cross-border transaction method.
They said that Bangladeshi expatriates prefer to send their hard-earned money through the hundi system because of the difference in the US dollar exchange rate.
Foreign exchange houses and banks offer a maximum of Tk 108 per US dollar to remitters while Bangladeshi expatriates get the highest Tk 115 per USD, when they send money through the illegal system.
The Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of Bankers, Bangladesh (ABB) recently fixed multiple US dollar rates for export, import and remitters.
The apex body of dealer banks had set a maximum USD rate of Tk 108 for foreign exchange houses to collect remittances. Zahid Hussain, a former lead economist at the World Bank Dhaka office, believes that the hundi system restored its past popularity after the Covid-19 pandemic.
He said that the hundi system is gaining prevalence once again for the multiple exchange rates for USD for remittance earnings, import payments and encashment of export bills.
The number of fresh migrants to Saudi Arabia was 57,439 during July-September of last year, which increased to 1,28,058 in the same period of this year, as per the data from the Bureau of Manpower, Employment and Training, Bangladesh (BMET,B).
Some 5,237 people migrated to Oman in the first quarter of the last fiscal year and the figure increased to 51,717 in the same period of this fiscal year.
The migration of Bangladeshi workers also has increased to UAE, Kuwait, Qatar, Singapore and other countries.
During July-September of this fiscal year, a total of 2,59,221 Bangladeshis, including 24,942 female workers, migrated from Bangladesh, as per the data from BMET.
But the remittance inflow continues to fall in recent months, which puts further pressure on the country’s foreign exchange reserves.
The expatriate Bangladeshis sent home $1.52 billion in October, down 7.4 per cent from a year ago and down 1 per cent from September this year, said BB data.
The country’s forex reserves stood at $34.06 billion as on November 23 of this year, which was recorded at $48 billion in August of last year.
