Remittance rises by 18pc in 2019
Incentive spurs growth: Experts
Inward remittance grew by nearly 18 per cent to a record $18.42 billion in the just-passed 2019 for a government effort to incentivise remitters.
The figures jumped from $15.53 billion in 2018, according to the central bank's latest statistics.
Financial incentive along with the depreciating mode of taka against dollar has helped boost the influx in the last calendar year, according to bankers.
The remittance inflow was estimated at $1.69 billion in December last, up by nearly $132 million from that of the previous month.
In November 2019, the amount stood at $1.55 billion. It was $1.18 billion in November 2018.
"We expect remittance flow to cross $20-billion mark by the end of the current fiscal year (FY), 2019-20," Bangladesh Bank (BB) executive director Kazi Sayedur Rahman told the FE on Wednesday.
The upward trend in influx would continue in the coming months as the government has announced 2.0 per cent incentive for remittance receipts, he hoped.
The government allocated Tk 30.60 billion in incentive in the budget for FY 20 to encourage migrant workers to send their money back home through legal channels.
"Besides, two Eid festivals are scheduled to be held this fiscal that will also help expedite remittance inflow," the executive director explained.
The central banker's expectation has come against the backdrop of a falling trend in outbound jobs of Bangladeshis in recent months.
This downtrend in overseas employments is because of a lower demand for workers in the Middle-Eastern countries, according to insiders.
More than 600,000 workers have found jobs in the last 11 months to November 2019 against 684,962 workers in the same period last year, showed the official figures.
Some important destinations like the United Arab Emirates, Malaysia and Bahrain have remained closed for Bangladeshi workers for long, they explained.
More than 12 million Bangladeshis went abroad since 1976, the official data disclosed. Talking to the FE, Pubali Bank managing director and CEO MA Halim Chowdhury said taka's depreciating mode against dollar also fuelled remittance inflow in 2019.
The local currency's exchange rate depreciated significantly against dollar in recent months mainly due to a higher demand for greenback to settle import bills.
Meanwhile, taka depreciated by Tk 1.0 against dollar in the inter-bank forex market from January 02 to December 30.
Greenback was quoted at Tk 84.90 each on December 30 against Tk 83.90 on January 02.
The government's incentive is encouraging non-resident Bangladeshis to remit their hard-earned money using banking channel instead of illegal "hundi" system, according to Mr Chowdhury.
"The uptrend in inward remittance may continue in the coming months following the government's incentive and taka's depreciating mode against dollar," Bangladesh Krishi Bank managing director Md Ali Hossain Prodhania.
Mutual Trust Bank managing director and CEO Syed Mahbubur Rahman earlier urged the BB to strengthen supervision to avoid possible misuse of such incentive as well as any unwanted situation.
The central bank earlier took multiple measures to encourage the expatriates to send their money through the formal banking channel only to help boost the country's foreign exchange reserves.
The forex reserve rose to $32.75 billion on Wednesday from $32.57 billion on the previous working day.