Remittance up 32.35% in May

Expatriate Bangladeshis sent $2.25 billion in remittances to the country this May, which is 32.35 per cent higher than the amount received in the corresponding month of 2023.

The remittance inflow, a key source of USD earnings of the country, was $1.7 billion in May last year, according to the latest data released by Bangladesh Bank (BB) on Sunday.

However, last month’s receipts were also 10.29 per cent higher than the amount — $2.04 billion — received in April this year. May’s remittance inflow is also higher than what Bangladesh received in March, which was $1.97 billion, the data showed.

Sector insiders said that the inflow has started to rise from May as the dollar exchange rate is higher and the country is set to celebrate Eid-ul-Azha in June. Insiders and banking experts both expect the remittance inflow to increase this month as well.

In general, remittance inflow into the country increases ahead of the major religious festivals every year as expatriate Bangladeshis send additional amounts of money to their loved ones on the occasion.

Remittance inflow did not cross the $2 billion mark in the first six months (July-December 2023) of the ongoing FY2023-24. However, the inflow exceeded $2 billion in four of the next five months (January, February, March and May of 2024).

Currently, the official exchange rate for remittance is Tk 117, in line with the crawling peg system which BB introduced last month following the International Monetary Fund’s recommendation. However, several banks are offering a higher rate to attract more remitters.

Talking to The Business Post, former BB governor Salehuddin Ahmed said, “Bangladesh can earn more than $2 billion from remitters every month, but unfortunately the remittance inflow only exceeds that mark ahead of Eid.”

“However, the inflow did not cross the $2 billion mark in March even though the country celebrated Eid-ul-Fitr in April. This was unexpected,” he said, adding that BB should address this issue and take stronger measures to stop hundi, an illegal system of cross-border transactions that bypasses the legal banking channel.

According to BB data, the country received $10.56 billion from expatriates in the past five months (January-May). The remittance inflow in January was $2.11 billion and $2.16 billion in February.