Tuesday, 26th October, 2021
Tuesday, 26th October, 2021

Remittance continues to slump in August

Remittance continued to dip for the third consecutive month in August, with seemingly no respite in the coming days.

Remittance inflow declined 8% year-on-year in August to $1.8 billion, the lowest in the past six months.

At the same time, the remittance in August decreased by about 3.25% compared to July, the first month of the fiscal year.

According to the Bangladesh Bank data, remittances sent by expatriates to the tune of $1,810 million in August, equivalent to Tk15,385 crore (if a dollar cost Tk85.)

The figure of $1.8 billion is lower than August 2020, when it was $1.96 billion.

Apart from this, compared to the first month of the current FY 2021-22 July, the remittance has decreased by about 3.25% in August. In July, the expatriates sent $1.87 billion, equivalent to Tk15,900 crore.

Also Read – Remittance drops to 5-month low in July

In June earlier this year, the last month of the last fiscal year, expatriates sent $1.94 billion, or Tk16,000 crore.

In other words, remittances for June were $693 million less than the previous month and about 28% less than the same month of the last year.

As a result, those concerned fear that the income will decrease further.

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Syed Mahbubur Rahman, managing director and CEO at Mutual Trust Bank, said: “We have to wait a few months more to find the reasons behind it.”

He suspected that hundi, a form of illegal money transfer, may be on the rise again, which remitters may be using more than the banking channels.

The central bank had earlier taken a series of measures to encourage the expatriate Bangladeshis to send their hard-earned money through formal banking channels, instead of the illegal ‘hundi’ conduit, which can help boost the country’s foreign-exchange reserves.

Also Read – Debapriya: Magic of remittance may come to an end

At present, the government gives an additional 2% incentive when remittances or expatriate income comes through the banking channel. In addition, many banks offer an additional 1% incentive.

Remittance is the second-highest forex-earner for Bangladesh after readymade garments.

A steady inflow of foreign currencies even during the coronavirus onslaught-when exports faced a setback–had raised the country’s foreign-exchange reserves over $48 billion recently.

In the outgoing FY 2020-21, the total remittance in the country is about $24.78 billion, which is more than Tk2 lakh crore. This income is 36% more than the $18.03 billion in FY 2019-20.

Currently, 29 exchange houses are operating across the globe, setting up more than 1,450 drawing arrangements abroad, to expedite the remittance inflow, according to the central banker.

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