Forex reserves get help from remittances

Remittance inflow has recorded a sharp rise in the last fiscal which rose to a record USD 15.53 billion (and increase of USD 2 billion from 2017) could not have come at a better time, especially since the country has been facing a decline in its foreign exchange (Forex) reserves. This increase has been made possible primarily due to increased monitoring by the central bank (BB) which has taken measures to crackdown on informal channels like hundi that had traditionally been used by our workers abroad to send money home. The fact that banks have introduced higher commissions for remitters to repatriate money using the legal financial system has also helped beef up inward remittances.

As the country moves forward with its many development and commercial projects, there have been increased payments made in foreign exchange for a host of imports, which have left the banks scrambling for dollars. While BB has regularly been injecting Forex into the market to stabilise it, experts believe that the increased monitoring on money laundering (especially for inward remittance) should be an ongoing one.

We have millions of expatriate workers and if they can remit their hard-earned money through formal channels (which must be made competitive in terms of financial charges), then the economy will be greatly benefitted. Although it is difficult to estimate precisely how many billions of dollars flow into Bangladesh as undeclared remittance, every effort must be made by authorities to shut down illegal channels since inward remittance remains one of the main drivers of the country's economic growth.