Remittance slips to 5-month low
Remittance flow to Bangladesh fell to a five-month low of $1.87 billion in July because of the post-Eid effects and fewer working days for banks.
The receipts are down 28 per cent year-on-year and 4 per cent from a month ago, according to data from the Bangladesh Bank.
In February, the Bangladeshi diaspora sent home remittance amounting to $1.78 billion. Since then, the inflow ranged between $1.9 billion and $2 billion a month before declining in July.
It had hit an all-time high of $2.6 billion in July last year.
BB officials say migrant workers usually send a significant amount of remittance before Eid-ul-Fitr and Eid-ul-Azha to their near and dear ones. So, remittance decreased sharply in the last week of July.
Bangladesh celebrated Eid-ul-Azha, one of the largest religious festivals for Muslims, on July 21. Banks were also closed during the three-day holiday.
"The inflow declines after the festivals to some extent," said Md Arfan Ali, managing director of Bank Asia.
In addition, the number of working days for banks was also lower than usual in July, putting an adverse impact on the inflow, he said.
Banks were closed between July 1 and July 4.
July 1 was the Bank Holiday. Banks also did not open on July 2 and July 3 because of weekends.
In addition, the central bank asked them to remain shut on July 4 as part of the government efforts to contain the coronavirus pandemic.
Syed Mahbubur Rahman, managing director of Mutual Trust Bank, says it is too early to comment on the remittance trend as it might bounce back in the coming months.
"It will take at least three to four months to understand the situation."
Remittance posted 36 per cent year-on-year growth last fiscal year, the sharpest in 30 years. Expatriates sent home $24.78 billion in 2020-21 in contrast to $18.20 billion a year ago.
The global hundi cartel, which operates an illegal cross-boundary financial system, has been facing a major disruption since the first quarter of 2020 as international travel came to a halt because of the pandemic, fueling the growth of remittances.
Many nations, including the countries where most expatriate Bangladeshis work, have enforced restrictions on the movement from time to time to contain the spread of the virus.
This has dealt a blow to the hundi system and encouraged the expatriates to send money through the formal channel.
In addition, both the government and local banks have taken some measures, including the introduction of cash incentives, making remitting money through the banking channel attractive.
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