BD receives record $23.75b so far this fiscal

Bangladesh is poised to see a new record in yearly remittance receipt as the country has already received US$23.751 billion in less than 10 months of this fiscal, in much-needed props to its forex reserves.

And this accumulated remittance figure is 96 per cent of the recorded remittance inflow of $24.777 billion registered in FY'21, officials and bankers said Tuesday.

Monthly receipt also continues on a steady rise. According to the latest data with Bangladesh Bank, the country's central bank, Bangladeshi citizens working abroad sent in remittances equivalent to $1.97 billion in the first 21 days of this month, which is 40 per cent higher of the corresponding period of the last fiscal.

With the latest, the country has so far received $23.751 billion in this current fiscal and is now just $1.03 billion away from setting a new record that is expected to be achieved by maximum early next month (May).

Since the financial year 2020-21, according to the official data, the $450-billion economy had earned $21.03 billion, $21.61 billion and $23.91 billion in FY'22, FY'23 and FY'24 respectively.

Seeking anonymity, a BB official said the rising trend in remittance continued following stability in exchange rate over the last several months.

Simultaneously, says the official, operation of the informal channels for remittance remained inactive because of close regulatory watch since the changeover in state power after the July-August mass uprising.

"These factors keep alluring the remitters into sending more money back home through banking channel. As a matter of fact, the remittance inflows came at such a pace never seen before," the central banker told the FE, on an upbeat note about the change on the foreign-exchange front.

Citing the current trend in inbound remittance, he said the remitters sent $93 million daily on average. With this pace, the receipt is expected to cross $24-billion mark within this month and break the record maximum by early next month.

Talking to the FE, managing director and chief executive officer of Mutual Trust Bank (MTB) PLC Syed Mahbubur Rahman said the banking industry continued receiving huge volumes of remittance in recent months, which is a "good sign" for the economy in the current macroeconomic context.

This upturn in remittance is not only helping bolster the country's foreign-exchange reserves but also enhancing banks' capability to meet their overseas payment obligations, the experienced banker said.

Dr M Masrur Reaz, an economist and chairman of Policy Exchange of Bangladesh, says cross-border siphoning off money has significantly declined after the latest mass uprising and it naturally decreased the supply and demand in informal channel.

On the other hand, the exchange rate remained fairly stable for the last few months which helps cut speculation on the market. "These twin factors are basically encouraging the remitters to send more money back home," says the economist.

The rising supply of foreign currencies is very important for BoP or balance of payments and currency stabilisation. It also helps increase consumption, which will help vibrate the economy in the coming days, he adds.

"This increase (forex) helps BB bolster its foreign-currency reserves, which will be critical for full normalisation of import. Ultimately, it supports the inflation-combating drives of the interim government," Mr Masrur explains the knock-on economic effect of remittance rises.

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