Remittance drops 21.47 pc in August

Staff Reporter :
Remittance inflow to Bangladesh slumped by 21.47 percent year-on-year to $1.59 billion in August making it the lowest in the last six months, according to central bank data released yesterday.

The amount of funds sent by Bangladeshi migrant workers was $2.03 billion in the same month of the previous year.

Besides, on a month-on-month basis, the remittance inflow slumped 19 percent in August from $1.97 billion in the previous month.

The country received $1.97 billion in remittances in July this year while in June it was $2.19billion.

According to bankers, banks are offering a remittance dollar rate lower than the market rate, leading to a decrease in the flow of remittances through the banking channel.

During August, the dollar was priced at Tk109 in the banking channel.

Earlier on 31 August, the Association of Bankers, Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers Association (BAFEDA) increased the remittance dollar price by Tk0.50 to Tk109.50 while the exchange rate in the informal market is between Tk117 and Tk118 per dollar
Besides, the government announced an incentive on the remittance exchange rate at 2.5percent.

Meanwhile, Bangladesh has achieved a remarkable milestone in its manpower export during the immediate past fiscal 2022-23, sending a record 11.37 lakh workers abroad.

Despite this impressive performance in exporting manpower, the inflow of remittances has not seen a corresponding increase. Remittances only grew by a modest 2.75 percent, reaching a total of $21.61 billion.

The amount is nearly 13 percent lower than remittances received two years ago despite the government’s incentive of 2.5 percent.

Migration experts and bankers have identified two major reasons for this discrepancy. Firstly, informal hundi operators, who offer higher exchange rates, are attracting remitters away from formal channels.

Secondly, a considerable number of unskilled workers being sent abroad may be affecting the overall remittance amount.

Addressing the issue, some bankers suggest that the central bank should allow commercial banks to purchase dollars at higher rates than the current prescribed one.