Remittances past $20b in 10 months
Remittance inflow surpassed the $20-billion mark in the first 10 months of this fiscal year riding on the relentless efforts of migrant workers to send their hard-earned money home through banking channels.
Between July and April, the Bangladeshi diaspora sent $20.66 billion, up 39 per cent year-on-year, according to data from the central bank.
For the first time in the country's history, remittance inflow crossed the $20 billion mark in a single fiscal year, a development that has given a breathing space to the government to absorb the economic shocks deriving from the coronavirus pandemic.
Remittance inflow also increased 89 per cent year-on-year to $2.06 billion in April as the migrant workers sent a whopping amount of funds ahead of Eid-ul-Fitr.
The inflow usually skyrockets before Eid-ul-Fitr and Eid-ul-Azha, the two biggest religious festivals for Muslims, as migrant workers send a hefty amount to their near and dear ones during these periods.The monthly remittance exceeded the $2-billion mark after four months. The expats sent $2.05 billion in December.
The stagnation of hundi, an illegal cross-boundary financial transaction, has largely pushed the country's remittances up in recent months, experts said.
A good number of countries have adopted strict restrictions on movement since the Covid-19 outbreak last year, putting an adverse impact on the operation of the global hundi cartel.
Travelling for different purposes, including medical and education, has almost come to a halt since the last year, dealing a fatal blow to the hundi cartel, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
Remittance may decline once again when the hundi cartel recommence their activities in a full-fledged manner, he said.
In addition, money laundering through imports has been almost brought to an end in recent months, a high official of a commercial bank said, wishing not to be named.
A vested quarter usually dodges taxes by way of under-invoicing while settling imports, he said.
Imports have nosedived in recent months as businesses have adopted a go-slow policy in setting up new industrial units or expanding existing ones.
Mansur also said the country's workforce export had nosedived since last year due to the business slowdown in most countries, which may bring a negative impact for remittance in the days ahead as well.
Between January and February this year, 85,242 Bangladeshi citizens went abroad, according to data from the Bureau of Manpower, Employment and Training (BMET).
Some 217,669 Bangladeshi people went abroad last year in contrast to 700,159 the year before.
On average, the country sends 7 to 8 lakh people abroad as workforce per year.
The government will have to lay great emphasis on exporting manpower abroad in order to keep remittance inflow stable in the years ahead.
Emranul Huq, managing director of Dhaka Bank, said the significant rise in remittance last month was a good indication.
The pandemic has helped a large number of migrant workers get accustomed to the formal channel for the transfer of their hard-earned money, he said.
This will play a positive role in increasing remittance in the days to come, he said.
Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said a large number of people were now facing a shortage of cash due to stagnation of a large portion of economic activities amid restrictions on movement.
"This also forced the migrant workers to send a robust amount of money to their relatives last month," he said, adding that the upcoming Eid also had a positive impact on the inflow.
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