Remittance hits 8-month high in Feb

Remittance inflows soared 39 percent in February to $2.16 billion, the highest in eight months, as expatriate Bangladeshis took advantage of the higher dollar rate offered by some banks.

Banks can offer the highest Tk 114.5 per dollar, including the Tk 2.5 government incentive, but some are offering up to Tk 123 per dollar, according to industry insiders. The official exchange rate is Tk 110.

"It is not possible to collect remittance at the official rate," said the treasury head of a private bank on the condition of anonymity to speak candidly on the issue.

He went on to urge the central bank to allow the dollar to float freely in the market to increase remittance flow through the official channels.

February's inflows take the remittance receipts in the first eight months of the fiscal year to $15.06 billion, up 7.5 percent year-on-year, according to data from the Bangladesh Bank.

However, the growth remains low, with analysts blaming money transfers through the informal channel popularly known as hundi, which offers higher exchange rates and more convenience compared with the official channels.

"Banks are trying their best to collect remittance as it is a big source for meeting the dollar shortage," said Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank.

As of February 28, foreign exchange reserves stood at $20.57 billion, enough to meet about three months' import bills, according to the latest published data by the BB.

A record number of Bangladeshi migrants went abroad in the last two or three years and they have started to send money to their relatives, said Sohail RK Hussain, president and managing director of Bank Asia.

In 2023, a record 13.05 lakh workers went abroad for jobs, went abroad for jobs, up 15 percent year-on-year, according to data from the Bureau of Manpower, Employment and Training.

The government and the central bank have taken several initiatives including incentives, all of which helped boost the remittance inflow, Hussain added.

Between February 1 and 24, Islami Bank received the highest remittance of $369.40 million, followed by National Bank at $220 million and Social Islami Bank at $180 million, according to data from the BB.