BB steps help boost remittance inflow

Against the fast depleting foreign exchange reserves of the country, some heart-warming reports are coming from the inward foreign remittance front. Notably, the precious inward hard currency that reportedly flowed into the economy last month amounted to US$2.528 billion. This is reportedly the fourth highest remittance receipt in a month recorded so far, while the highest receipt ever recorded was in December last year (2024) at US$2.638 billion, according the central bank. February's remittance receipt, too, marked a 23.8 per cent growth year-on-year. In the last eight months of the current fiscal year 2024-25, the total remittance inflow stood at US$18.49 billion, up from US$14.93 billion during the same period in the previous fiscal year.

Admittedly, the positive development in the country's second biggest forex earning source is welcome. It would hopefully cushion the economy against the multiple challenges arising from every conceivable sector. Now, the first thing this steady growth in remittance inflow can do is to provide some respite to the ever-declining forex reserve, which last month increased by 1.8 per cent to US$20.90 billion, calculated using IMF's so-called BPM6 method, says BB. No doubt, the enhanced remittance dollars have come in handy for the government to clear its overdue import bills, servicing foreign debt obligations, stabilising Taka against US dollar through intervening in the forex market and managing the economic shocks from the massive flight of capital, looting of banks and the overall destruction done to the economy by the previous dictatorial regime.

Increase in remittance, thanks to the BB's various regulatory measures, has arrested the decline in forex reserves as well as successfully kept the hundi operators at bay from diverting the flow of remittance dollars from the government-run formal banking channel to the so-called grey market. But the central bank has evidently witnessed a revolutionary transformation with the changing of the guard in the administration in the wake of the student-led upsurge. Hence is the rise in the remittance flow. It has also to be admitted at this point that migrant workers usually send higher amounts of remittance during the Ramadan and on other Muslim religious occasions so their families at home might meet extra expenses required during these special events. So far so good. But the central bank or the government for that matter should not be resting on its laurels, but must go the distance to arrest further raises in the exchange rate under the prevailing reference rate regime to avoid returning to a volatile forex market inviting speculators. That would again create the abhorred grey market to attract foreign remitters.

In addition to taking measures to assure optimal inflow of remittances from existing sources, the government needs also to work for expanding the foreign labour market as well as increasing skills training facilities for those workers who are already in the pipeline seeking overseas jobs. This should be complemented by preparing professionals, particularly in the IT sector, for grabbing jobs on offer in countries with fast aging population.