Bangladesh recorded just $1.6 billion in inward remittances for the month of August, a six-month low that narrowly surpassed February's $1.56 billion.
The country received $2.19 billion in remittances in June, followed by $1.97 billion in July, raising hopes of an uptick stabilising around $2 billion. But the August data arrived to shatter such misconceptions.
Also read: Bangladesh received $1.97 billion remittance in July
Year-on-year, inward remittance flow declined by 21.57 percent in August, from the high of $2.03 billion in 2022-23, and $1.81 billion in 2021-22.
The sector insiders and observers could only point to increased hundi i.e. sending or receiving money via careers or other irregular channels, as a cause for the decline. Normally hundi increases when the dollar price gap widens in the kerb (open) market than in banking channels.
Also read: $21.61 billion remittances in FY23, second highest ever
“When demand for hundi increases, remittances decrease. The dollar was fetching Tk 5-6 more in the kerb market than in banks last month. So, expatriates reduced sending remittances through legal channels to avail the higher offer in the kerb market,” they pointed out.
For almost a year now, banks have been fixing the price of the dollar in terms of payment of export and expatriate income and import liabilities for the dollar crisis and market stability.
Now the banks are offering Tk109.5 per dollar for expatriate income. Export bill encashment offers a price of Tk109.5 per dollar and a maximum of taka Tk110 for import and interbank transactions.
Also read: US Dollar rate Tk108.5 for remittance, Tk107 for exports from Thursday