Remittance inflow has continued its upward trend for 10 consecutive months in July, registering an 18 percent year-on-year growth thanks to the depreciation of the taka against the US dollar.
Expatriates sent home $1.31 billion in the month whereas it was $1.11 billion in the same month last year, according to Bangladesh Bank data released yesterday.
July's receipt, however, is slightly lower than $1.38 billion that came in June because of the “post-Eid hangover”, a BB official told The Daily Star.
The country celebrated Eid-ul-Fitr, one of the largest religious festivals of Muslims, in June and remittance dropping to a lower figure the following month is a regular phenomenon, he said.
He expected remittance inflow to spike ahead of Eid-ul-Azha, scheduled to be celebrated on the fourth week this month, as family members of expatriates need extra money to buy sacrificial animals.
Bangladeshis living abroad are remitting more money through the formal channel as their near and dear ones are now getting a better rate against the dollar, said Syed Mahbubur Rahman, managing director of Dhaka Bank.
Many banks are offering higher rates against the remitted greenbacks to encourage non-resident Bangladeshis to send money through their channels, Rahman said.
On August 1, the interbank exchange rate was Tk 83.75 per USD, up from Tk 80.66 a year earlier.
The country's banking sector has been facing a shortage of greenbacks for several months because of higher import payments, said Rahman, also the chairman of the Association of Bankers, Bangladesh, a platform of the chief executive officers of the private banks.
The upward trend of remittance inflow is helping reduce the country's large current account deficit, he said.
The current account deficit hit a record $9.37 billion in the first 11 months of the just concluded fiscal year.
Banks are deploying representatives abroad to increase remittance through their channels, Rahman said.
At the same time, the central bank has strengthened its surveillance against hundi, an illegal cross-border fund transfer process, Rahman said. The central bank's monitoring has given a boost to remittance inflows, he said.