Remittances drop 16.28pc in April

Staff Reporter  :
Inward remittance declined by 16.28 per cent in April compared to the same month last year.
Total remittances sent by Bangladeshi migrant workers reached $1.68 billion in April, $350 million less than the previous month (March), according to a central bank data.

Out of the total remittance, state-owned commercial banks received $ 244.50 million, $ 49.94 million came through the specialised banks, local private banks and foreign banks received $1.383 billion and $ 5.53 million respectively.

Meanwhile, in the first ten months of the current FY’23, the total amount of remittance stood at $17.718 billion. In the financial year 2021-2022 and 2020-2021, Bangladeshi workers abroad sent home $21.03 billion and $ 24.77 billion remittance respectively.

Remittance had begun to fall sharply from October 2022 due mainly to dollar crisis in the banking system.
Remittance inflow also declined in February this year to reach to $1.56 billion.

Before February, the inflow of remittance had increased for three consecutive months until January.
But the inflow again declined in April.

Bankers said that informal channels for sending remittances had become more popular due to instability on the foreign exchange market in the country, as the informal channels offered better exchange rates for foreign currencies compared with the formal channels.

Using hundi, an illegal channel, for sending money to the country is a major cause of the ongoing dollar crisis on the financial market, they said.
Earlier, the government offered a 2 per cent incentive to encourage migrant workers to use the legal way to send their earnings home due to the lower rate of the greenback.

But the government’s move seems to yield positive result as the inward remittances continue to fall.

The Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) on Sunday also increased the exchange rate of dollars for remittance by Tk1 to Tk108 effective from Tuesday.

Apart from not using legal channels, the Bangladesh Financial Intelligence Unit (BFIU) in October also said some importers tend to under-invoice to evade taxes and pay the difference to suppliers abroad by purchasing remittance dollars from the hundi market, which also accounted for a fall in remittance inflows.

Only 51 per cent of the remittances that come to Bangladesh comes through formal and legal ways. And the rest, 49 per cent of the remittances come through hundi (illegal channel), according to officials.