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Significant rise in remittance

Published : 21 Jun 2022 09:35 PM | Updated : 22 Jun 2022 02:59 PM

Remittance inflow is rising again to cross $20 billion for the second time in history in the outgoing fiscal year.

It is the second highest to stand at $20.01 billion during 11 and half months this fiscal, thanks to devaluation of money against US dollar and incentives to remitters.

A fairly good amount of remittance poured in during April-May and the momentum has increased further in June, the last month of the current fiscal 2021-22. Expatriates have sent $964.20 million in the first 16 days of this month.

Now, if the expatriates send one dollar to the country, the relatives can get about Tk 95 toTk 96 with incentive.

If they send it through a state-owned bank, they are getting a little more money. This is because the banks are providing incentives at the rate of 3 percent by adding an additional 0.50 percent to the government incentive of 2.50 percent.

However, remittance inflows hit a record high of $24.77 billion in the fiscal year 2020-21 despite the Covid-19 pandemic.  

Economists and bankers have expressed hope that remittance inflows will further increase in the country during the remaining days of this fiscal ahead of Eid-ul-Azha.

They said expatriates were continuously sending money home despite the coronavirus pandemic, which provided oxygen for the country’s economy during the crisis. 

They said the remittance flow rapidly increased through official channels during the pandemic due to travel restrictions imposed by most of the countries in an effort to combat the COVID-19.

As a result, this has significantly increased the remittance inflow through legal channels and discouraged the ‘hundi’ business, they said.

Although for several months, this inflow showed a downtrend, various time-befitting initiatives taken by the government resulted in an increased awareness among expatriate workers to send their hard-earned money through legal channels, pushing up the remittance inflows again, they mentioned.

However, the government has taken various initiatives for the welfare of both expatriate workers and workers returning from abroad to boost remittance inflow.

Md Serajul Islam, spokesperson and executive director of Bangladesh Bank, said, “More remittances come all the time before Eid as expatriates send more money to their relatives for expenses ahead of the festivals. Last month (May) a little less than expected poured in. It will increase again this month because Eid-ul-Azha is close by. Then again, the expatriates will send more remittances which is normal.”

“Incentives have increased. The value of the dollar is also higher. Expatriates sent more money to their families in April ahead of Eid-ul-Fitr. Good remittances have also come in the month following Eid. Eid-ul-Azha is ahead. Rising fuel prices will boost remittances from Saudi Arabia and other Middle Eastern countries. It seems that remittances will increase in coming days,” he added.

Besides, the Ministry of Finance has given the same forecast. According to a recent report by the Ministry of Finance, expatriate income or remittances, which have been in negative growth for the current fiscal year, will achieve 16 percent growth in the next fiscal year. The new fiscal year 2022-23 will start from July 1.

The report said the reason for the increase in remittances in the new fiscal year was that in the post-Corona period, about five and a half lakh workers will be relocated from the country.

Dr Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), said, “The whole world was shut down because of Covid-19 pandemic in FY21. As a result, sending remittances through hundi was also stopped. The expatriates sent all the money through banking channels. That is why, remittances have significantly increased during this time.”

“I think the amount of remittances in Bangladesh is actually $16 billion to $18 billion. The remittances that came in the last fiscal year were actually due to the closure of hundi. Expatriates are now sending money to the country through illegal hundi as before as the situation has returned to normal and the dollar price is high in the curb market,” he mentioned.

“Even with 15 days left in the outgoing fiscal year, I think remittances of over $20 billion are very positive,” he added.

However, expatriates sent $1.88 billion in remittances in May this year which decreased by 13 percent as compared to the same month of last year.

In the same period of previous year, it was $2.17 billion. 

Eid-ul-Fitr was celebrated in the country on May 3. Expatriates sent a total of $2.09 billion remittance to the country in April ahead of Eid. It was the highest amount in a single month of the current fiscal year.

This means remittance fell by $125 million or 6.23 percent in a month.

This important index of the economy increased last December and January after a decline for five consecutive months (July-November 2021). In December and January, remittance was $1.63 billion and $1.70 billion respectively.

In February, this inflow stumbled again as expatriates sent $1.49 billion during the time.

On the other hand, the country’s migrants sent home $1.86 billion in March ahead of Ramadan this year, which is 25 percent more than that in the previous month and also the highest in the past eight months.

However, the country received $22.07 billion in remittances in 2021, which was more than that in any other year in the history of Bangladesh. This inflow was $21.78 billion in 2020 and $18.33 billion in 2019.

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