Remittance increased 16.54 percent year-on-year to $4.51 billion in the first quarter of the fiscal year thanks to a government move that provides 2 percent cash subsidy to remitters for sending money through official channels.

As per a central bank notice, for amounts of up to $1,500 expatriates will receive 2 percent cash incentive directly to their accounts without any verification from this fiscal year.

For amounts of upwards of $1,500, sources of income and other documents will have to be presented.

“The cash subsidy gave a boost to the inflows,” said Kazi Sayedur Rahman, an executive director of the central bank.

For instance, the inflows in August were $1.44 billion, which climbed up to $1.47 billion the following month – up 28.95 percent year-on-year, according to data from the Bangladesh Bank.

The upward trend in remittance will give some breathing space to the government in defending the exchange rate.

Besides, the Bangladesh Financial Intelligence Unit and other law enforcing agencies have recently stepped up their drive to prevent money laundering, including hundi, Rahman said.

The initiative has also given a momentum to mobilise foreign currency from abroad.

The price of petroleum products in the global market is now on the rise, which has given room to Middle Eastern countries to go for economic expansion.

“This has also pushed up remittance as the majority of the inflows usually come from those nations,” Rahman said.

Local banks’ import payments are on the rise, so they too are putting in effort to bring remittance, he said.

He went on to express hope that remittance would increase more in the months ahead because of the latest initiative, which will help the government manage its balance of payments better.

The exchange rate of the taka against the US dollar is also favourable for remitters, which has encouraged them to send their hard-earned money through the banking channel, said an official of a commercial bank.

On September 30, the interbank exchange rate was Tk 84.50 per USD, up from Tk 83.75 a year earlier.