Expatriates send $1.17b in 16 days

Bangladesh received over $1 billion as remittance in just 16 days of August, a good sign amid the ongoing volatility in the country’s foreign exchange market.

Bangladeshi expatriates sent $1,171 million between August 01 and August 16, up by 16.30 percent year on year as per the latest data from the Bangladesh Bank.

The remittance earning was at $1,007 million during the same period of last year.

Remittance earning has slowed in the recent months due to mainly the gap of US dollar rates between the kerb market and banking channels, said industry insiders.

After several months, the remittance earning crossed $2 billion in July of this year. In July, Bangladesh received $2.2 billion as remittance as per the Bangladesh Bank data.

Till now there is a gap of Tk8-Tk10 between the kerb market and banking channels, which prompted Bangladeshi expatriates to use hundi system, a illegal cross-border transaction, said a high official of BB.

In this situation, the Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) urged the government through the central bank to increase the cash incentive against wage earners’ remittances to 5.0 percent from existing 2.5 per cent.

The apex body of foreign exchange dealers has recently sent a letter to the BB in this regard.

On 14 August, the BB asked banks to maintain Tk1 spread between the buying and selling rates of USD. The Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) set the Tk1 spread earlier in 2006.

However, most of the banks are yet to maintain the spread.

Mutual Trust Bank Managing Director Syed Mahbubur Rahman said: “We are trying to maintain the spread between the buying and selling rate of USD.”

He said his bank had already lowered the USD rate in case of collecting remittance from the foreign exchange house. Mutual Trust Bank offered from Tk110 to Tk111 to collect remittance on Wednesday.

On Wednesday, the USD rate stood at Tk109-Tk110 in the kerb market, down from Tk119 to Tk120 a week ago.

Industry insiders said the forex market would soon be stable as the BB had taken a series of initiatives to control the growing import payment.

Now, banks have to inform BB 24 hours before opening an import letter of credit (LC) worth $3 million or above.