Home ›› 04 Apr 2022 ›› Front
Remittance inflow hit $ 1.86 billion in March from $ 1.49 billion in February – around 25 per cent increase – in the current fiscal following a lacklustre show in the last financial year.
The sending of bucks remained strong till July of FY22 following a slowdown in FY21. Since August of this fiscal it continued to decline and fell to $ 1.49 billion in February.
About the March remittance earnings, former Bangladesh Bank governor Salehuddin Ahmed told The Business Post that remittance inflow usually increases ahead of festivals.
“Though Ramadan started in April, expatriates sent more remittance in March keeping this festival in mind. The trend will continue till Eid,” he opined.
According to the Bangladesh Bank latest data, the total remittance earnings was $ 15.3 billion for July-March period of the current financial year, which is 17.76 per cent lower than the same period of the previous fiscal. Remittance earning was $ 18.6 billion for July-March of FY21.
Excluding the pandemic-driven situation, the amount of remittance that Bangladesh usually earns in normal time is more than what was accrued in the last nine months of the current financial year.
Remittance earning was 11 per cent higher in July-March period of the current fiscal.
In this context, Salehuddin Ahmed said with the ease of pandemic, economy has turned around while domestic demand and consumer purchase capacity have increased. Keeping this mind, expatriates have sent more money.
Analysts believe that remittance has also been affected by the declining trend of manpower export.
In July-February period of this fiscal, the total manpower export stood at 5,75,669. In FY21, it was only 2,80,258.
Tasneem Siddiqi, founding chair, Refugee and Migratory Movements Research Unit, told The Business Post that, “Remittances have risen mainly ahead of Ramadan and Eid. This trend will continue till Eid ul-Azha.”
“Remittance income is on the rise as labour migration has more than doubled in the first eight months of the current financial year over the previous fiscal.”
The researcher, however, is optimistic that the migration situation will be better this year if pandemic dies down.
“Besides, if manpower is exported to Malaysia, the situation will improve and remittance will go up.”
In addition, imports have risen sharply as the Covid-19 situation has improved, which had an impact on the macro economy. The trade deficit reached $ 18.69 billion in July-January, with import payments rising 46.23 per cent, which is the highest in Bangladesh’s history.
Economist Ahsan H Mansoor fears that if remittance income and export growth do not continue, trade deficit could widen which will put a huge pressure on reserves.
He expressed concern during a pre-budget discussion on Saturday.
Foreign exchange reserves stood at $ 44.25 billion on March 30, which could meet around five months’ import payment.
In August last year, the reserve was $ 48 billion, which was an all-time high.
Analysts say remittances will play a role in meeting the dollar crisis created by the abnormal rise in imports. The dollar price rose to Tk 86.20 recently.
