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Remittances rebound again

Published : 19 Dec 2022 10:27 PM | Updated : 20 Dec 2022 03:13 PM

Remittance from expatriates, one of the main sources of foreign exchange reserves, have started to increase again after declining for two consecutive months.

Remittances witnessed a rising trend after various measures taken by Bangladesh Bank including tough steps against illegal hundi money transferring business.

In the first nine days of this month (December), expatriates sent around $941 million after various measures to increase expatriate income in banking channels. As part of its move, an average of $60 million came every day in December.

Last November, expatriates sent $1594.70 million. An average of $53.10 million came every day. In the previous two months, October and September, $49.20million and $51.30 million respectively came daily.

In the first two months of the current fiscal year 2022-23, in July and August, remittances came to the country in the amount of about $70 million per day.

However, remittances stood at $2.09 billion in July, $2.04 billion in August, $1.54 billion in September and $1.52 billion in October in the current fiscal year 2022-23.

Economists and bankers said remittances returned to a positive trend in November after falling for two consecutive months due to various measures taken by the central bank. 

As the trend turned more positive in December, relief began to return, they said, suggesting that the Central Bank should take tougher steps to ban hundi to increase remittances through legal channels.

Bangladesh Bank officials hope that the amount of remittances will reach $2 billion in the month of December like July and August this year. However, a continued decline in remittance flows from expatriates increased in November. 

Bangladesh received record $2.10 billion remittances in July, the first month of the fiscal year 2022-23, due to Eid-ul-Azha festival when expatriate Bangladeshis usually send home more money than any other time. 

The figure is the highest in 14 months and 12 percent higher than the $1.87 billion remittance the country received in the same month of the previous FY.

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

The country received $22.07 billion in remittances in 2021, which was higher than any other years in the history of Bangladesh. This inflow was $21.78 billion in 2020 and $18.33 billion in 2019.

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

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

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

On the other hand, Bangladesh’s reserves are increasing again despite the Bangladesh Bank giving a record amount in dollar support to the commercial banks from the reserves.

Experts said the reserves are rising slightly again thanks to a declining trend in import payments.

Till last November 30, reserves, the most important indicator of the economy, dropped to $33.86 billion, falling below $34 billion.

In the past few days it has increased again to cross $34 billion to stand at $34.10 billion till 18 December, according to BB data.

On August 24 last year, the reserves crossed the $48 billion milestone, surpassing all past records.

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