A massive boost in remittance inflow

It is encouraging to note that expatriate Bangladeshis have been reported to have remitted around $1.009 billion during the first half of September.

In local currency the amount stands at Tk 108.93 billion as per recent buying per dollar rate at Tk 108. The exchange rate has been jointly fixed by Bangladesh Foreign Exchange Dealers Association (BAFEDA) and Association of Bankers Bangladesh (ABB) few days back.

Understandably, two key reasons for a sudden surge in remittance inflow are because of government's cash incentive support and higher exchange rate of dollars.
Though the last fiscal inward remittance was slow, but the current trend is positive as the economic shockwave caused by covid-19 is on its path to recovery. Moreover, once Russia - Ukraine war is ended, which we expect to end anytime soon, buying and selling costs of US Dollar will become stable and thus become easier for us to adjust the price in accordance to our market driven economy.

However, a number of bankers have opined that if the first 15 days' trend continues until end of September the remitted amount will cross $2 billion mark.

Unquestionably, the much needed inflow of remittance would hugely support the ongoing dollar crunch caused by payments for higher import bills.

We thank the government initiative for paying cash incentives to our expat remitters. It is manifestly paying back with dividends.

However, In July, $330 million in remittance was channelled to Bangladesh through state-run commercial banks, $32.42 million through state-run specialised banks, $1.78 billion through private banks, and $6.64 million through foreign banks.

We believe the amount would have been even higher, if a chunk of our expat workers would have prohibited from remitting money through informal and illegal channels.

In Bangladesh, remittance has markedly proved out to be one of the most important economic variables in recent times as it has a direct impact on economic growth, helps in balancing balance of payments, increasing foreign exchange reserves, enhancing national savings while increasing velocity of money.

For about two decades remittance has been contributing around 35% of export earnings. Moreover, it has lessened our excessive dependence on foreign aid.

Since the past couple of decades it has evolved as the second largest sector of foreign currency earnings after the RMG sector.

Besides our sincere appreciation, we also urge the government to continue offering incentives to our remitters, so to attract even a higher amount of steady inflow of remittance in the country. At the same time, intensives would also discourage our expat workforce to refrain from sending money via illegal channels to the country.