Remittance inflow rose further in January to relieve strain on Bangladesh's reserves, primarily as the government raised cash incentives for remitters, officials say.
The money sent home by Bangladeshis working abroad amounted to $1.70 billion in January 2022, up by $ 73.79 million from the previous month's level, according to the central bank's latest statistics, released Tuesday.
In December, the remittances amounted to $ 1.63 billion.
However, the inflow of remittances dropped by 13.12 per cent or $257.46 million compared to that of the same period of 2021 as the expatriates sent $1.96 billion during that period.
The official figures also show that the inward flow of remittance dropped by nearly 20 per cent to $11.94 billion during the July-January period of the current fiscal year (FY), 2021-22, from $14.91 billion in the same period of the previous fiscal.
Meanwhile, the government has already raised the cash incentives on inward remittance to 2.5 per cent from 2.0 per cent earlier, aiming to encourage the remitters to send their hard-earned money through official channels instead of the illegal "hundi" system.
Effective from January 01, the new rate is a New Year's gift to the remitters from the Prime Minister, according to a statement issued by the finance ministry earlier.
"We expect that the upward trend in inward remittance will continue in the coming months as the government has increased the incentives for remittance receipts," Kazi Sayedur Rahman, deputy governor of the Bangladesh Bank (BB), told the FE on Tuesday.
Mr Rahman also says the inflow of remittances normally rises ahead of the Holy Ramadan.
Talking to the FE, another BB official hoped higher overseas employment would help boost the inflow of remittances during FY '22.
A total of 617,209 Bangladeshis found jobs in different countries in 2021 despite the Covid-19 pandemic against 217,669 a year before, according to Bureau of Manpower Employment and Training (BMET) statistics.
Currently, 29 exchange houses are operating across the globe, setting up nearly 1500 drawing arrangements abroad, to expedite the remittance inflow, according to the central banker.
Echoing the BB officials' views, managing director (MD) and chief executive officer (CEO) of Dhaka Bank Limited Emranul Huq said the ongoing upward trend of inward remittance may continue in the coming months as the Holy Ramada and the Eid-ul-Fitr festival are ahead.
Market operators, however, say enhancement of incentives for remittance receipts has helped reduce the gap between formal banking channel exchange rate of the US dollar against the Bangladesh Taka (BDT) and kerb market slightly.
"Enhancement of the incentives along with close monitoring by the central banks has pushed up the inflow of remittances through the banking channel," a senior official of a leading private commercial bank (PCB) told the FE.
He also says the US currency traded at nearly Tk 89 on the kerb market on the day against around Tk 90 earlier.
The central bank had earlier taken a series of measures to encourage the expatriate Bangladeshis to send their hard-earned money through the formal banking channel, instead of the illegal 'hundi' system, in order to help boost the country's foreign-exchange reserves.
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