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Remittance inflow rises slightly

Staff Correspondent
02 Dec 2022 00:00:00 | Update: 01 Dec 2022 22:35:43
Remittance inflow rises slightly
— File Photo

The remittance inflow slightly rose by 2.64 per cent in November, showing a good indicator that could bring some relief amid the foreign exchange reserves crisis.

Last month, migrant Bangladeshi workers sent home $1.59 billion, up from October’s $1.52 billion, according to the latest Bangladesh Bank data. The amount was $1.55 billion in November last year.

With this, migrants remitted $4.65 billion in the past three months — September to November — of the ongoing FY2022-23. The amount was $4.92 billion during the same period of FY2021-22.

Remittance inflow has been falling in recent times due to the fixed rate of the US dollar in the case of remittance collection.

Forex houses and banks offer the highest Tk 108 per US dollar to remitters while the Bangladeshi expatriates get the highest Tk 115 per USD when they send money through the illegal system.

The Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of Bankers, Bangladesh (ABB) recently fixed multiple US dollar rates for export, import and remittance sectors.

BAFEDA set a maximum USD rate of Tk 108 for forex houses to collect remittance.

Zahid Hussain, the former lead economist of the World Bank Dhaka office, believes remittance inflow has been falling because the hundi system has become operational once again after the Covid-19 pandemic situation improved.

“The hundi system is once again gaining prevalence due to the multiple USD exchange rates for remittance earnings, import payments and encashment of export bills,” he said.

The country’s forex reserve has been declining due to the downward trend of remittance and export earnings. The reserve stood at $33.86 billion on November 30, according to the central bank.

However, if the reserve is calculated without $8 billion in compliance with IMF conditions, the actual amount will be $25.86 billion.

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