Remittance inflow drops 5.86% in July

Bangladesh’s remittance inflow has fallen below the $2 billion mark yet again, as the country posted a $1.97 billion figure in July this year, which is a 5.86 per cent dip when compared year-on-year. The figure was $2.09 billion in July 2022.

Meanwhile, compared to June this year, Bangladesh’s remittance inflow dropped by 11.45 per cent, shows latest data from the Bangladesh Bank on Tuesday.

Commenting on the declining trend of remittance, central bank assistant spokesperson and Director of Foreign Exchange Policy Department Sarwar Hossain said, “Eid-ul-Azha was celebrated in June.

“Remittances are usually high in the months before Eid, and fall in the following month. As Eid-ul-Azha was celebrated in July last year, remittances were still higher than usual during that particular period.”

As a result, compared to those months, the remittance inflow will naturally be less in July this year, Hossain added.

According to a latest study by the Refugee and Migratory Movements Research Unit (RMMRU) on remittance inflow during the pandemic, the amount Bangladesh received through formal channels during the crisis is the actual amount the country should receive annually.

This figure was $24.77 billion in FY21. Experts say that Bangladesh’s monthly remittances income should potentially be more than $2 billion.

Former lead economist of World Bank Dhaka Office Zahid Hussain said, “Due to the boom in manpower exports after the Covid crisis, remittance inflow should be around $24 billion every year.

“I believe that Bangladesh is not getting the desired remittance inflow because of widespread use of illegal channels in the process, and lack of market-based exchange rates.”

In this context, Sarwar said, “In June this year, the country received more than $2 billion in remittance, and this figure was $1,973 million in July. So there is not much difference between the two figures, and the gap is getting close to being resolved.

“The government is now offering higher rates for remitters, and the 2.5 per cent incentive is being continued as well. As a result of these initiatives, we expect that Bangladesh’s remittance inflow will be averaging out at around a monthly $2 billion figure in the months ahead.”

For remitters, the exchange rate was increased by Tk 0.50 to Tk 109 on Monday. The decision came in a meeting of the Bangladesh Foreign Exchange Dealers Association and Association of Bankers, Bangladesh (ABB).

In terms of export earnings, the USD rate has been increased by Tk 1 to Tk 108.50. Besides, the price of the USD has also been increased by Tk 0.50 to Tk 109.50 in the settlement of imports.

Bangladesh has been witnessing a USD crisis since last year. As a result, Taka has depreciated by more than 29 per cent against the greenback. The USD rate stood at Tk 84.80 on July 26 last year.

As a result of the USD crisis, the amount of foreign exchange reserves in Bangladesh has decreased steadily.

In July last year, the country’s reserve position was $39.59 billion, and on July 26 this year, it went down to $29.68 billion. However, during the same period, Bangladesh’s gross reserves amount was $23.31 billion if calculated using the International Monetary Fund (IMF) method.