National, Front Page

Remittance hits new record of $18bn

Published : 02 Jul 2020 09:59 PM | Updated : 07 Sep 2020 05:41 PM

The country's remittance inflow witnessed a record high reaching $18.20 billion in last fiscal 2019-20 despite a global economic recession amid the Covid-19 crisis – a 10.85 percent up from the preceding year.

In June 2020, the remittance inflow stood at a record $1.83 billion for a single-month, exceeding the previous milestone of $1.74 billion in May last year.

Besides, the country's foreign exchange reserves reached the high-ever $36.14 billion on Thursday.
Though millions of Bangladeshi migrant workers toiling abroad due to the crisis and fall in global oil prices, crisis-ridden expatriates are still providing oxygen for the economy by continuing to send remittances at home, market analysts said.

They said expatriate workers have continued to send money to their homes to meet family expenses despite the fact that they have been suffering from various crises including financial constraints due to coronavirus pandemic.

Currently many expatriate workers don’t have money in their hands as they could not work for a long period of time due to the lockdown, but they borrowed money for sending them to their families, they added.

An official of Bangladesh Bank (BB) mentionedthat timely initiatives were taken up by the government at various times which apparently resulted in an increased awareness among expatriate workers to send their hard-earned money through legal channels, pushing up the remittance inflow.

Besides, the higher growth of remittance inflow is attributed to a budget declaration of 2 percent incentive to remitters on inward remittance for the last fiscal year.

However, the government has allocated Tk 30.6 billion in the national budget for the fiscal 2019-2020 for giving 2 percent cash incentive, aiming at facilitating the expatriates to mitigate the burden of increased expenses in sending foreign remittances.

This will significantly increase the remittance flow through legal channels and discourage the ‘hundi’ business, economist said.
In fiscal (FY) 2018-19, the country’s remittance inflow stood at a record high of $16.41 billion, according to Bangladesh Bank (BB).
This inflow increased by about 9.5 percent in FY2019 from $14.98 billion in the previous fiscal.

However, Bangladeshi expatriates sent home $11.65 billion in FY11, $12.84 billion in FY12, $14.46 billion in FY13, $14.23 billion in FY14, $15.31 billion in FY15, $14.93 billion in FY16, $12.77 billion in FY17 and $14.98 billion in FY18 respectively.

Earlier, the government and Bangladesh Bank (BB) were worried over a sliding trend in remittance inflow during fiscal years 2015 to 2017.

However, the country has made a strong comeback in recent times, thanks to some good steps taken by the government, BB officials said.

It also helped to increase the country’s forex reserve, they added.
Executive director of the Policy Research Institute Ahsan H Mansur said, "The remittance is not the recent income of our migrant workers. It is their savings.”

“Currently many expatriate workers don’t have money in their hands as they could not work for a long period of time due to the lockdown, but they borrowed money for sending them to their families, he added.

On the other hand, “Many expatriates started to send money at home because they may have to come back within a short time.”
Islami Bank deputy managing director, Abu Reza Mohammad Yahia said, “The remittance is known as the best indicator of the economy of Bangladesh, but expatriate income has decreased due to corona crisis.”

“Expatriates in the Middle East are still sending their income to support their families at home,” he said adding that it is uncertain how long they can continue this.

Eminent economist Zahid Hussain told Bangladesh Post, “Cash incentive to remitters has helped to boost inward remittance last fiscal.”

It is unlikely that the growth will sustain next year as Bangladesh expatriates have faced many challenges abroad, he said adding that, coronavirus has broken down all activities of the world.

He mentioned most of the unskilled workers of Bangladesh who work in the middle-eastern countries feared to lose their jobs as many companies have temporary closed while many small businessmen have passed critical time following coronavirus scare.

“We need to create skilled manpower for jobs abroad side by side tapping new job markets like in the European region to raise remittance inflow further, he added.
Over 1.02 crore Bangladeshi expatriates are currently working in 174 countries across the world.