Home ›› 02 Dec 2021 ›› Front
Bangladesh’s remittance inflow has slipped 25.35 per cent year-on-year to $1.5 billion in November – the lowest in past eighteen months, as illegal money transfers gradually returned to the pre-pandemic level.
With November, the downward trend of inflow continued for six consecutive months, says latest data from the Bangladesh Bank, adding that the month’s figure fell by 5.77 per cent compared to October 2021.
A number of experts and bankers at tributed the decline in remittance to the return of “hundi” system – an illegal cross-border transaction network – after travel bans eased across the globe, long-term impacts of the Covid-19 pandemic, and a pause in migration activities.
When Bangladesh’s remittance inflow was gaining momentum during the Covid-19 crisis and subsequent travel bans imposed by different nations, experts and bankers had warned that the inflow will not be sustainable as new manpower exports remained paused since March 2020.
From July to November this fiscal year, Bangladeshi expatriates remitted $8.60 billion, a nearly 21 per cent decline when compared year-on-year, the central bank data shows.
On the issue, former lead economist at World Bank Dhaka office Zahid Hussain said, “The remittance inflow had increased amid the pandemic due to the collapse of informal channels such as the hundi system, thanks to the travel bans triggered by the pandemic.
“The country received record remittance last year because of this, but now, the informal channels have returned as most of the countries withdrew their travel bans.”
Former managing director of Trust Bank Faruq Mainuddin Ahmed said, “Bangladeshi expatriates had sent more money to their relatives amid the pandemic due to the crisis triggered by the deadly virus. But now, the remittance inflow is getting back to normal.
“Besides, a large number of migrants returned home permanently amid the pandemic, which is one of the reasons behind the declining trend of inflow.”
Mutual Trust Bank Managing Director Syed Mahbubur Rahman recently told the Business Post that the falling trend of remittance inflow has already impacted the foreign exchange market.
“If the trend continues in the coming months, the forex reserve will drop further,” he added.
As of Wednesday, the interbank exchange rate for per US dollar stood at Tk 85.80, which was Tk 85.70 a month ago, the Bangladesh Bank data shows.
The central bank started selling US dollar to the country’s banks from August this year to help stabilise the foreign exchange market.
According to the regulator, it sold $568 million to the country’s banks in November alone. The foreign exchange reserve stood at $44 billion until November 24, a drop from $46 billion recorded in October 31.
