Remittance flow to Bangladesh has maintained its robust growth in January despite the persisting pandemic although it dropped below $2 billion for the first time in the last five months.
Expatriate Bangladeshis sent home $1.96 billion last month, up 19.78 per cent year-on-year, data from the central bank showed yesterday.
Remittance fetched more than $2 billion for Bangladesh between September and December. The inflow, however, has started to slow since September.
Between July and January, the country received $14.9 billion in remittance, up 34.95 per cent a year ago, BB data showed.
"The magnificent growth of remittance has given a boost to the confidence of the government in managing the macro-economy in times of crisis," said Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development.
But he raised a question: why has remittance been increasing during the pandemic?
"We do not have any research to find out the reasons for the growing trend of remittance during the pandemic."
Mujeri, a former chief economist of the central bank, said migrant workers might have sent more money to support family members during the crisis.
Many migrant workers lost jobs as their host countries have imposed lockdowns to contain the deadly virus, which might have compelled the migrants to send all assets back home.
The hundi system, an illegal cross-border money transfer system, has come to a halt because of the restriction on movement and this might have taken remittance to a new high, Mujeri said.
"These are all hypothesis. The government should carry out research to unearth the actual reasons for the upward trend of remittance."
The research will help find out whether the trend is temporary or will last long, he said. "The findings will assist the government in taking measures to maintain the flow."
Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said it would take at least a couple of months to understand the trend.
Although labour export has almost come to a halt, remittance has been on the rise, raising a natural question, he said.
Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), said that remittance had created a mismatch from both micro and macro-economic perspectives.
Remittance has helped swell the country's foreign exchange reserve, which stood at $42.91 billion yesterday compared to $32.38 billion a year ago.
In a study conducted between November and December, the Sanem found that remittance to households declined during the pandemic.