Remittance growth carries country's foreign reserves to record high

Remittance inflow in the country amid the coronavirus pandemic continues to grow as Bangladeshi expatriates sent $211.20 crore (Taka 17.962 thousand crore) in October.

In October, 2019, Bangladesh received $168.16 crore in remittance when economic landscape was normal. This year, global trade, business and job suffered major shockwave wrought by pandemic and economists were predicting a major setback in remittance inflow as many jobs were vanishing around the globe.

However, Bangladeshi expatriates proved them wrong sending higher percentage of remittance over the last four months from July to October which was 43.24 percent in overall growth.

In July, the first month of the current fiscal year 2020-21, record amount of remittance was registered at $259.82 crore and in August, $196.39 crore.

During the first four months of the current fiscal year (July to October) expatriates sent $882.50 crore in remittance.

This amount was $616.10 crore dollars in the first four months of the last fiscal year, which means remittance inflow growth was at 43.24 percent.

Ahasan H Mansur, Executive Director of Policy Research Institute, said, Bangladesh economy would suffer if remittance inflow goes dry as many families depend on the income of the person abroad.

Commenting on the upward trend of remittance inflow, Md Sirajul Islam, Executive Director and Spokesperson of Bangladesh Bank, said, Bangladesh economy is starting to turn around riding on remittance sent by expatriates and reopening of businesses.

“Our citizens who are working outside the country are sending more remittance than the normal times, which is encouraging,” Sirajul Islam added.

As remittance inflow is increasing so is the reserve as it hit $41 billion as of Saturday which is enough to meet imports costs for at least nine months.

The growth in forex reserve has also been helped by eroding import cost as foreign trading has hit the bottom thanks to the pandemic. Import cost has shrunk by 8.56 percent in 2019-20 fiscal year and on top of that in first quarter of the current fiscal year, import cost shrunk further at 11.47 percent. Plummeting import expenditure has also helped grow the reserve coupled with higher remittance inflow.

From June to October this year, around $8 billion added were to the reserve.

Finance Minister AHM Mustafa Kamal thanked the expatriates for their contribution to help the economy move forward and also came down heavily on the critics who were skeptical about the foreign reserve.

Finance minister recently said, “Some people, with some international agencies, are casting doubt on our foreign reserve saying this figure is not right and will not be sustainable. I am surprised how those people, instead of encouraging our expatriates who are sending their hard-earned money, are criticizing and discouraging them".

Foreign reserve increased steadily over a few months. It exceeded $34 billion on June 3. Within the span of three weeks on July 24, it hit $35 billion.

Maintaining a healthy growth, foreign reserve hit $37 billion on July 28 and jumped to $38 billion on August 17.

By October 8, foreign reserve reached a milestone record of $40 billion and by the end of October foreign reserve stood at $41 billion dollars.

World Bank said remittance inflow sent by expatriates increased in 2020 and will increase 8% by the end of this year. And Bangladesh will be among the top 8 countries to receive higher remittance this year.

sh/zn