remittance
BB allows floating exchange rate of US dollar amid pressure
Bangladesh Bank on Thursday withdrew the fixed exchange rate of US dollar for banks allowing the market to decide the rate based on demand and supply.
The central bank on Thursday backtracked on its earlier decision after the remittance from expatriates marked a fall and exporters failed to convert their bills since the bank set a single exchange rate of a dollar at Tk89 on Sunday.
Also read: BB to set uniform exchange rate to stabilize volatile dollar
The BB informed banks the latest decision by giving some regulatory instructions. As a result, banks can set their (banks) own dollar price in line with the market demand.
The BB directive said that expatriate income (remittance) and import bill will be exchanged at a competitive market price of dollars. Besides, export income will be encashed at market price of dollar. Banks will sell dollars at a slightly higher price than they buy it.
Md Serajul Islam, executive director and spokesperson of BB told UNB that the central bank allowed banks to fix dollar pricing in consequence of market demand from Thursday.
Also read:BB depreciates taka by Tk 0.40 against US dollars
Explaining why the decision was made, he said, "Banks have said that those who are sending remittances do not think the dollar rate is right. Therefore, banks will set the dollar rate depending on the competitive market.”
But the BB instructed banks they cannot make any abrupt raise in dollar price,” Serajul said.
At the same time banks were instructed to keep watch on the money exchange houses so that they cannot raise dollar prices at unusual levels.
Expatriates send $1.65 bn in 26 days of May
The ministry of finance is expecting the growth of inward remittance by 16 per cent in the fiscal year FY2022-23.
Bangladesh has, meanwhile, received inward remittance of USD $1654.94 million (1.65 billion) in 26 days of May.
The ministry in a report said that over 5.5 lakh workers went abroad in the post Covid-19 period from the country. The trend of manpower export will continue as many countries of the Middle East and Europe are hiring more workers to meet the huge non-skill and semi-skilled manpower.
Also read: BB moves to encourage greater flow of remittance to boost forex
Besides, Qatar's football World Cup preparations have also created huge job demand in the service sector in the Middle East.
Bangladesh Bank (BB) data shows that foreign exchange reserve is increasing thanks to growing inward remittance in the recent months despite huge import payment demand.
If the remittances reach this trend the amount of inward remittance is likely to cross $2 billion in May, said Md Serajul Islam, executive director and spokesperson of BB.
The remittance inflow will increase in the next month ahead Eid-ul-Azha, as the expatriates are expected to send additional money on the occasion of the festival, he said.
He said that remittance inflow has increased due to ease of incentive delivery process and devaluation of Bangladeshi taka.
Also read: Bangladesh receives record $2.09 billion remittance in April
Bangladesh has received $18, 9662.71 million or $18.97 billion since June 1 to May 26 of FY 22.
BB moves to encourage greater flow of remittance to boost forex
Bangladesh Bank has withdrawn the provision of mandatory submission of documents for getting incentive against inward remittance of USD $ 5000 or Tk50, 0000 and upward, in a move to encourage greater inflow of remittance.
Kazi Rafiqul Hassan, general manager, foreign exchange department issued a circular on Monday withdrawing the document submission obligation for an indefinite period.
As a result, the remitters will get a 2.5 per cent instant incentive for any amount of remittance sent in the formal channel, without submitting documents to the foreign exchange houses abroad.
Also read: BB halts foreign trips of its officials, employees
The BB asked all the scheduled banks to execute the decision from May 23 (Monday).
In the current fiscal year Bangladesh so far received $18.62 billion in remittance.
In the last FY 21, Bangladesh received $24.77 billion remittance, so far the record high in a fiscal year.
The sector insiders said the inward remittance flow has decreased as the hundi and other illegal channels became active after withdrawing pandemic-induced travel ban.
The government encourages increased flow of remittance in the legal format as demand for foreign currency has grown due to meet import payments.
Bangladesh is witnessing an increasing import of capital machinery, industrial raw-materials, LPG-fuel oil and commodities swelling the import payments.
Also read: Bangladesh’s forex reserves cross $44 bn thanks to better inflow
Besides, the deferred payment of LCs done during the severe pandemic is scheduled for payment now.
According to the BB over $68 billion worth of LCs opened in the first 9 months of current FY 2021-22.
Bangladesh receives record $2.09 billion remittance in April
Bangladesh has received USD $2.09 billion in remittances in April, the highest amount in a single month of the current fiscal year.
Bangladesh Bank (BB) published the updated information on Thursday (May5).
Also read: Remittance inflow rises ahead of Eid
According to the sector insiders, expatriates usually send more remittances to the country on the occasion of Eid festival.
In its continuation, the flow of remittances has increased since the beginning of Ramadan.
Besides, the government is now giving 2.5 percent incentive on remitances.
Also read: Remittance income increasing from USA, EU
According to the BB, five state-owned commercial banks received $354.89 million in April, private commercial banks received remittance of $1612.74 million, foreign banks$7.35 and two specialized banks $34.51 million.
Bangladesh received $1.85 billion in remittances in March of fiscal year 2021-22.
Remittance inflow rises ahead of Eid
Remittance inflow has increased ahead of Eid-ul-Fitr as Bangladesh received $ 1.82 billion remittance from April 01- 27.
Bangladesh Bank (BB) is expecting that the figure will exceed USD $ 2 billion as expatriates are sending additional money for their relatives ahead of Eid-ul Fitr.
Md. Serajul Islam, executive director and also spokesperson of BB told UNB on Saturday that a total of $ 1.82 billion remittance were received by different banks from April 01- 27.
He hoped that more than $30 billion remittance will be received in the remaining days of April.
Read: Customs houses to remain open during Eid holidays
Bangladesh received $1.87 billion in July, $1.81 billion in August, $1.72 billion in September, $1.64 billion in October and $1.55 billion in November, $1.63 billion in December, $1.70 billion in January, $1.14 billion in February of FY 22.
The expatriates sent $ 2.17 billion remittance in the month of May last year, ahead of Eid-ul Fitr.
In March 2022, the expatriates sent a $1.86 billion remittance. The inward remittance inflow of the last nine months of FY22 saw a decreasing trend compared to the corresponding months in the FY21.
In the same period of FY21, the remittance inflow was $2.59 billion in July, $ 1.96 billion in August, $ 2.15 billion in September, $ 2.10 billion in October, $2.07 billion in November, $2.05 billion in December, $ 1.96 billion in January, $1.78 billion in February and $1.91 billion in March.
Remittance income increasing from USA, EU
Bangladesh received second highest remittance from the United States in March, which showed a change in inward remittance flow.
The remittance earning has been dominated by the Middle Eastern countries since independence. But now the situation is changing as many Bangladeshi skilled people work in the developed countries, said Md. Serajul Islam, Executive Director and Spokesperson of Bangladesh Bank (BB).
“By analyzing the earlier record of the BB, we found that the inward remittance flow is gradually increasing from the USA and European Union, outside the Middle East,” he said.
The remittance earning will get diversified becuase of freelancing job in the developed countries like the US, Canada and the EU, he said.
READ: Remittance inflow down by $ 3.25 billion in 8 months of FY 22
The BB’s remittance update shows that Bangladesh received USD $308.82 million remittance from the US in March, which is highest so far in remittance from the country in a single month.
In March Bangladesh received inward remittance of $377 million from KSA, $214.16 million-UK, $ 184.14 million-UAE, $144.48 million-Kuwait, $119.59 million-Qatar, $85.88 million- Italy, $ 81.43 million-Malaysia, $74.30 million-Oman, $57.48- Bahrain.
The central bank data shows that inward remittance inflow has increased from the US during the worst period of Covid-19 pandemic.
According to the Ministry of Expatriate Welfare and Overseas Employment, there are currently 12 million Bangladeshis living in different countries of the world.
Reviewing the data of the Central Bank, it is seen that the expatriates in the Middle East, America and European countries are playing a major role in remittance earning of Bangladesh.
Since independence, Bangladesh has always received major share of remittances from Saudi Arabia. This was followed by the the United Arab Emirates. The United States is now second and the United Kingdom is third. The UAE, once second, now ranks fourth.
The largest market for Bangladeshi expatriates is Saudi Arabia with around 2.2 million Bangladeshi migrants there.
Bangladesh’s forex reserves cross $44 bn thanks to better inflow
Bangladesh’s forex reserves rose to USD $ 44.30 billion again after a month, thanks to growing inward remittance.
The forex reserve fell to $43.89 billion on March 6, 2022 after paying import bills of $2.16 billion to Asian Clearing Union (ACU). It was the lowest forex reserves for Bangladesh in past one year.
The remittance inflows of $15.30 billion in nine months of the current (July-March) fiscal year (FY), pushed the foreign currency reserves to 44.30 billion on Sunday in contrast to a month ago.
Bangladesh Bank (BB) sources said with the reserves, it will be possible to meet the import costs over five months. But even six months ago, Bangladesh Bank had reserves to meet the import cost of 10 months.
Also read: Bangladesh’s forex reserve expected to thrive on increased remittance inflow
However, the inflow of remittance is still in negative growth in the first nine months (July-March) of the current 2021-22 fiscal year. In these nine months, the expatriates have sent $15.30 billion remittance. During the same period of the last fiscal year 2020-21, the expatriates sent $ 18.59 billion remittance.
It shows that the inflow of inward remittance has decreased by 18 per cent in 9 months despite remittance inflow increase by 24.45 per cent in March compared to February.
Md. Serajul Islam, executive director and spokesperson of BB told UNB that remittance inflow in the banking channel is increasing gradually after raising the cash incentive to 2.5 per cent.
The expatriates are taking Tk 102.5 by sending Tk 100 remittance in the hassles-free legal channel, he said.
Serajul hinted that the remittance inflow would increase in April for Ramadhan and Eid as the expatriates usually send more money to their relatives in the country during the festival.
The inward remittance inflow of the last nine months of FY22 saw a decreasing trend compared with the similar months in the FY21.
Also read: No decision yet to lend private sector from forex reserves: Finance Minister
Bangladesh received remittance $1.87 million in July, $1810.10 million in August, $1726.71 million in September, $1646.87 million in October and $1553.70 million in November, $1630.66 million in December, $1704.53 million in January, $1149.08 million in February and $1859.97 million in March of FY22.
In the same period of FY21, the remittance inflow was $2598.21million in July, $ 1963.94 million in August, $ 2151.05 million in September, $ 2102.16 million in October, $2078.74 million in November, $2050.65 million in December, $ 1961.91 million in January, $1780.59 million in February and $1910.98 million in March.
Remittance inflow down by $ 3.25 billion in 8 months of FY 22
Bangladesh’s remittance inflow decreased by USD $ 284.5 million to $ 1496.09 million in February of the current fiscal year compared with the same month of last fiscal year.
In February of FY2020-21, the expatriates sent remittance of $ 1780.59 million to the country.
Bangladesh received $ 13.44 billion remittance in the first 8 months of the current FY2021-22 which is counted from 1st of July every year. In the same period of last FY2020-21, the expatriates sent $16.68 billion. It means flow of inward remittance has decreased by $3.25 billion.
Read: Remittance Magic: Bangladesh received $11.95bn in 7 months
Bangladesh Bank (BB) data released on Tuesday found that the expatriates in different countries of the world sent $1496.09 million inward remittance through banking channels.
The previous month, in January, expatriates sent inward remittances of $ 1704.53 million, in December $1630.66 million.
The government has been providing a 2 per cent incentive from the FY2019-20 to increase remittance inflow in the formal channel (banking) discouraging hundi.
Read:Central bank devalues taka to boost exports, remittances
After easing global Covid restriction on movement, the inward remittance flow decreased gradually compared with the severe pandemic period. In the last FY2021-22 Bangladesh received a record $ 24.77 billion remittance, which is the highest ever.
In January 2022, the government increased remittance incentive to 2.5 per cent to increase the inward remittance flow in the banking channel.
It means the expatriates are now getting hassle-free Tk 102.5 for sending Tk 100 remittance through banking channels.
Read Govt raises incentive on remittance to 2.5%
The sector insiders said that Bangladesh's remittance inflow would increase in the remaining period of the current fiscal year as the government increased incentive rate and upward trend of fuel oil prices in the global market.
Remittance Magic: Bangladesh received $11.95bn in 7 months
Bangladesh received USD $ 1704.45 million ($1000 million is equal to 1 billion) in remittances in January 2022, which is $73.79 million more than December, 2021.
The Bangladesh Bank (BB) released the latest remittance update of inward remittances sent by the non-residents Bangladeshis (NRBs) through different banks. The remittance inflow got momentum through the legal channel in January as the government raised the incentive from 0.50 percent to 2.5 percent, insiders said.
Some banks also provided an additional 1 percent to attract remittance through the particular banks.
Bangladesh received $24.77 billion in the last 2020-21 fiscal year through the banking channel as the transaction through it came down due to international flight operation halted for Covid-19 pandemic.
READ: Central bank devalues taka to boost exports, remittances
The remittance inflow through the legal channel saw a decline in the current fiscal year as it got diverted to illegal channels, including hundi, after the global flight operation eased.
However, the overall remittance inflow is lower in the current financial year as compared to the previous year.
According to the central bank, Bangladesh received $11.95 billion remittance in the first seven months of the current fiscal year.
The expatriates sent $1871.49 million in remittances in July, $ 1810.10 million in August, $ 1726.71 million in September, $ 1646.87 million in October, $1553.70 million in November, $1630.66 million in December and $1704.45 million January of the current (FY 2021-22) year.
How remittance benefits Bangladesh
The inward remittance to Bangladesh has lifted many people from poverty and served as a cushion for families during difficult times, as the country saw during the pandemic.
According to economists, remittance has been the backbone of the National economy as it provides inputs in financing Bangladesh's trade deficit.
READ: Govt raises incentive on remittance to 2.5%
According to a recent study by the World Bank, remittance has helped to reduce the poverty level in Bangladesh by 1.5 percent.
Remittance to exceed $25 billion by end of current fiscal : Finance Minister
Finance Minister AHM Mustafa Kamal has said that he is hopeful that the country’s remittance will exceed $25 billion by the end of the current fiscal , up from current $21 billion.
“During the two occasions of Eid, we hope our expatriates send huge remittances that will help exceed the last fiscal year’s benchmark”, he told reporters while briefing the outcomes of the consecutive meetings of the two cabinet Committees—Cabinet Committee on Public Purchase and Cabinet Committee on Economic Affairs on Monday.
The finance minister noted that in the last fiscal 2020-21, the country’s remittance reached nearly $25 billion.
Also read: Bangladesh Bank allows receiving remittances through OPGSPs
He admitted that all the economic indicators of the country remained positive except the remittance.
“We’re lagging behind our expectations in remittance earnings. But two Eid festivals will play a big role in boosting the remittance”, he added.
Kamal also claimed that he is still hopeful that the country will achieve the 7.2 percent economic growth as all the sectors are performing well although the International Monetary Fund (IMF) recently made a projection at 6.6 percent in this regard.
"The IMF and the World Bank always make conservative projections, but our projection finally sustained”, he said.
The minister said the export has made 24.3 percent growth and by the end of the current fiscal the total export earnings will reach $47-$48 billion.
He said the country holds huge potentials to grow economically, but those potentials were not utilized in a right manner.
Also read: ‘No idea who’re siphoning off money; give me a list’: Finance Minister
“In last 12 years, under the leadership of Sheikh Hasina, we have been able to exploit such potential. That’s why we have succeded”.
Responding to a question, he said the government prefers the local companies in the contract of supply of electronic devices in the public purchase.
“We want to promote the Made in Bangladesh products in the public procurement”, he said.