Dhaka has seen a significant decline in remittance inflow over the last three fiscal years, dropping 13.14% to $6.9 billion in fiscal year 2023 from $8 billion in FY2021, despite remitters from the district earning the highest amount annually. Other districts also experienced declines in remittances. Chattogram received $1.61 billion in FY23, Cumilla $1.28 billion, Sylhet $1.24 billion, and Brahmanbaria $645 million in the same fiscal year. The decline is attributed to a gap between exchange rates in the informal market (kerb market) and the formal banking channel.
Remitters are increasingly using informal channels (hundi) to send money, as they receive more favorable rates compared to the formal banking channel. This discrepancy has impacted the country’s economy, with remittances falling 21% to $1.59 billion in August 2023 compared to the same month the previous year. The drop in remittances is causing concern among experts and financial institutions.