National, Front Page

Remittance to bolster Bangladesh economy

Published : 21 Jul 2022 10:04 PM | Updated : 22 Jul 2022 04:43 PM

While the world's economy is threatened by the rise in the value of the US dollar, remittance has been showing Bangladesh a ray of hope and leading the economy from the front.

Experts said rising remittance inflows have been providing oxygen for the country’s economy despite the global crisis.  

In the last one year, the local currency Taka has depreciated by about 10.80 percent to stand at Tk 93.95 against US dollar in the inter-bank forex market as the country's import demand had picked up recently. 

On the other hand, the greenback sold at the rate of around Tk 100 in the open or curb market.

Despite this dollar crisis, Bangladesh Bank has recently given good news for the country as remittances are increasing again and playing a vital role in reducing the crisis.

The central bank, expressing hope amid various fears and disappointments, said that due to the loss of value of money against the dollar, remittances, one of the main sources of foreign currency, will increase in the coming days.

Besides, the Central Bank has also given bad news about the export trade. Despite a big jump in export earnings in the last fiscal year, it may decrease in the new fiscal year due to the Russia-Ukraine war, a Bangladesh Bank recent report said.

However, remittances have jumped and stand at $1.24 billion in the just first 14 days in July in the new fiscal year 2022-23. In July of FY22, it stood at $1.87 billion.

Md Serajul Islam, executive director and spokesperson of Bangladesh Bank, told the Bangladesh Post, “Eid-ul-Azha was celebrated in the country on July 10. The expatriates were sending more money to their families to make necessary purchases including for sacrificial animals. That is why remittances are soaring.”

He said, “The remittance flow is good even after the holidays. If this trend continues, the amount of remittances will exceed $2 billion at the end of the month.”

Dr Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said, “The remittances that came in the fiscal year 2020-21, which were about 25 billion, had a different perspective. It can be said that the whole world was closed due to Covid-19 during the time. Because of that, sending remittance through Hundi was also stopped. The expatriates sent all the money through banking channels. That is why remittances increased.”

“In my opinion, the amount of remittances to Bangladesh is actually $16 billion to $18 billion. That could be $20 billion as the new 5-6 lakh people go abroad,” he mentioned.

However, after something like a stumbling block in the just-concluded fiscal year, the country's remittance inflows witnessed a solid start in the new fiscal year 2022-23, which is good news for the country, an official of Bangladesh Bank said.

The remittance inflows stood at $21.03 billion in FY22, a decrease of 15 percent over the previous fiscal, according to Bangladesh Bank data.

On the other hand, 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.

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.