The country received the lowest remittance in September this year in 41 months although it has sent around 10 lakh workers abroad in the first nine months.
According to data from the Bangladesh Bank (BB), Bangladesh received $1.34 billion in inward remittances in September last.
Earlier, the lowest remittance inflow was recorded back in April 2020 at $1.09 billion.
Bureau of Manpower, Employment and Training (BMET) data said Bangladesh started manpower export in 1973. It has exported the highest manpower in the first nine months of the current year. A total of 9 lakh 89 thousand 685 workers were sent abroad during the period which was 8 lakh 74 thousand 739 in the same period of the last year. This is a milestone in the country’s manpower export sector. Surprisingly, the country’s export earnings have been decreasing since 2022 despite record manpower exports. At the same time, the country’s foreign reserve is also declining gradually.
Bangladesh witnessed a 16 per cent decline in inward remittance in September than August. Remittances came in at $1.54 billion in September 2022 which was $1.60 in August. As such, the country's year-on-year (YoY) remittances decreased by around 13 per cent. In September last year, expatriates sent $1.54 billion remittance in the country.
Experts said remittance flow is decreasing due to various reasons. Expatriates choose informal cross-border money-transfer channels like ‘hundi’ for high rates. A big amount of remittance is coming into the country through illegal channels. This remittance can’t help increase the country’s foreign reserve. Money laundering is another reason for declining foreign reserves, they opined.
Syed Mahbubur Rahman, Managing Director of Mutual Trust Bank Limited (MTB) said, the market exchange rate of the US dollar is not the only solution to the ongoing dollar crisis. Resolving the dollar crisis is not possible without stopping illegal money transfer channels. Hundi is a big pressure on the dollar crisis. The demand for the dollar has increased due to the hundi.
“It is essential to conduct an aggressive action to stop hundi completely. If you (law enforcers) cant’s detain some of hundi traders, this business will be continued,” he added.
Mahbubur Rahman, however, said it would be better to bring the dollar exchange and market rate closure.
If the market fixes the dollar rate, then it might help to reduce the ongoing dollar crisis. At the same time, the use of hundi will have to be decreased, he said.
The dollar market became unstable in February of last year due to the Russian invasion of Ukraine. The IMF had set Bangladesh’s forex reserves target at $25.34 billion by September and $26.81 billion by June next year as conditions for the loan package.
According to the BPM6 – reserve calculation method – Bangladesh’s forex reserves stand at $21.15 billion now.
On a net basis, this amount has further decreased to below $18 billion. In this situation, economists and experts emphasize stopping illegal money channel hundi and money laundering to increase foreign reserves.
According to data from the Bangladesh Bank, expatriates sent $2,161 crore in remittance in the 2022-23 fiscal, $2,103 crore in the 2021-2022 fiscal, $2,477 crore in the 2020-2021 fiscal and $1,820 crore remittance in the 2019-20 fiscal year.
@ The article was published on print and online versions of The Bangladesh Pratidin on October 19, 2023 and has been rewritten in English by Golam Rosul.
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