The inflow of remittances crossed US$6.0 billion in the first four months of the current fiscal year (FY). The flow of inward remittances rose by more than 20 percent to US$6.15 billion during the July-October period of FY 2019-20 from $5.11 billion in the same period of the previous fiscal.
Remittance inflow was $1.64 billion in October, the second highest remittance inflow in a single month. October’s receipts were 32.28 percent higher from same month of last year and 11.64 percent from a month earlier, according to the latest data from the central bank.
In September last, the remittances stood at $ 1.47 billion. It was $1.24 billion in October 2018.
Among the receiving channels, all the private commercial banks (PCBs) received $1.24 billion as remittances in October last while the state-owned commercial banks (SoCBs) received $353.17 million, foreign commercial banks (FCBs) $15.82 million, and Specialised banks $30.24 million.
Inflow of remittance had witnessed significant growth recently amid the government’s move to issue 2 percent cash incentive against the inward remittances. Bangladesh Bank expects the flow of inward remittance may increase further in the coming months as expatriate Bangladeshis are now encouraged to send their hard-earned money through the formal banking channel, instead of the illegal “hundi” system to avail the incentive.
The government had already allocated Tk 30.60 billion as incentive in the budget for the FY 2020 to encourage the expatriate workers to send their money through legal channels.
The finance ministry has already released Tk 15.30 billion as incentive for remittance receipts for first six months of this fiscal and remaining Tk 15.30 billion will be released later. However, many of the beneficiaries of inward remittances are yet to get the incentive for various reasons. Bangladesh Bank assures that they would introduce the facility soon and the beneficiaries would get the incentive in arrear from July 1, 2019.
Depreciating mode of the local currency against the US currency has also helped increasing the flow of inward remittance in the recent months. The exchange rate of Bangladesh Taka (BDT) depreciated significantly against the US dollar in the recent months mainly due to higher demand for the greenback for settling the import bills.
Meanwhile, the local currency depreciated by 85 poisha against the greenback in the inter-bank forex market from January 02 to October 24. The greenback was quoted at Tk 84.75 each in the inter-bank market on October 24 against BDT 83.90 on January 02 this calendar year.
Volume of inward remittances grew manifold to $16.42 billion in 2018-19 financial year, from less than a billion ($763.91 million) in FY 1990-91 in a span of 30 years.
According to Bangladesh Bank data, remittance receipt was $15.32 billion in 2014-15, which went down to $14.93 billion in 2015-16, $12.77 billion in 2016-17 and $14.98 in 2017-18.
However, the number of overseas employments registered a falling trend in recent months following slow demand for workers in Middle East countries.
Some 469,275 workers found jobs in the nine months to September 2019 against 555,393 outflow workers in the same period of the last calendar year, according to the official figures.
Some important destinations including the United Arab Emirates (UAE), Malaysia, Kuwait and Bahrain remained closed for Bangladeshi workers since long.
According to BB, some 1.15 crore expatriate Bangladeshis are staying and working in different countries across the world.