The country’s remittance inflow has witnessed a new record at $18.32 billion at the end of 2019. This inflow increased by 17.88 percent or 2.78 billion during the time comparing the same period of time last year, which was $15.54 billion, according to Bangladesh bank. Market analysts said, “The government has started giving 2 percent cash incentive on money remitted by expatriate Bangladeshis to remove the burden of increased expenses in sending remittances.”
It will encourage expatriates to send money through legal channels instead of ‘Hundi’, they said adding that the government is working hard and taking various activities locally as well as abroad to boost remittance inflow. Besides, depreciation of the local currency against the US dollar has also pushed the inflow of remittances up in the recent months, they mentioned. However, the local currency Taka depreciated by Tk 1 against US dollar in the inter-bank forex market during the last year.
The greenback was quoted at Tk 84.90 each in the inter-bank market on Thursday against Tk 83.90 in January 02. However, Bangladeshi expatriates sent home $1.59 billion in January, $1.32 billion in February, $1.46 billion in March, $1.43 billion in April, $1.75 billion in May, $1.37 billion in June, $1.60 billion in July, $1.44 billion in August, $1.48 billion September, $1.64 in October, $1.55 billion in November and $1.69 billion in December in 2019 respectively.
Former advisor to the caretaker government and eminent economist AB Mirza Azizul Islam told Bangladesh Post, “Remittance inflow has recently increased as the government has taken many initiatives including providing cash incentive to remitters as well as strong dollar rate.” BB officials said remittance inflow increased at a record high last fiscal and continued, which is good news for them. They said, “We expect that the upward trend of inward remittance would continue in the coming months as the government has announced 2.0 percent incentive for remittance receipts.”
The government has already allocated BDT 30.60 billion as incentive in the budget for the current fiscal (FY), 2019-20, to encourage the expatriate workers to send their money through legal channels, they added. 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, $14.98 billion in FY18 and $$16.42 billion in FY19 respectively. The Finance Minister expects that the inflow of remittances may stand at $20 billion in ongoing fiscal year 2019-20.
Lead Economist of World Bank, Dr Zahid Hussain, told Bangladesh Post, “The remittance has recently increased as local currency Taka has depreciated against US dollar besides oil price hike abroad.” Hussain pointed out that Bangladeshi expatriate workers, who speak little English, have poor basic formal education and few vocational industry-specific skills, often face severe job insecurities.
The government should immediately solve these problems and focus on boosting remittance flow which will help increase foreign exchange reserve, he added. The government should train up local workers as skilled labour before sending them abroad, Zahid said, adding that Bangladesh should build good relations with other countries for sending more skilled workers abroad, which will boost up remittance flow significantly.