Remittances dip below $2b ahead of Eid

Staff Reporter :

The inflow of inward remittances fell below $2 billion in March for the first time this year due to a decline in dollar prices against taka and the growing use of the hundi system.

The Bangladesh Bank data showed that expatriate Bangladeshis sent home $1.99 billion in March, down from $2.16 billion a month ago and $2.11 billion in January.

Likewise, remittance inflow also dipped by 1.23 percent year-on-year, from $2.02 billion in March a year ago.

Industry insiders attribute the decline to the growing use of the hundi system since expats get better rates in US dollars if they transfer funds through the illegal cross-border system instead of formal channels.

They also said that most days in March, the exchange rate of the US dollar declined to Tk 113–114, down from Tk 120–122 in January and February, which also played a significant role in the decrease in remittance inflow.

Earlier, inward remittances demonstrated strong performance for two consecutive months, with the country receiving over $2 billion each in January and February this year.

In February, Bangladesh witnessed its highest remittance inflow in the past eight months, totaling over $2.16 billion.

This significant development provides a welcome relief for the country’s diminishing foreign exchange reserves.

From March 1 to 31, the highest $491.79 million remittance came to the country through Islami Bank Bangladesh.

State-owned Janata Bank came in second as it channelled $148.75 million, while private commercial lender BRAC Bank brought home the third-highest amount of $125.23 million.

The central bank data showed the remittance inflow in the first nine months of the current fiscal year of FY24 was $17.05 billion, up by more than 7 percent year-on-year.