Bangladesh's inward remittance inflow crossed the $3.0 billion mark for the first time in history in March this year, which gave the much-needed impetus to the country's depleting foreign currency reserves.
According to the Bangladesh Bank (BB) data, Bangladeshi citizens working abroad sent remittances equivalent to $3.29 billion in March, a nearly 65 per cent jump from the $1.99 billion that came in the same month a year earlier, driven by the celebration of the Eid-ul-Fitr festival.
Inward remittances were $2.53 billion in February this year, the data shows.
Moreover, the inflow of remittances during the July-March period of the current fiscal year grew by more than 27 per cent to $21.78 billion from $17.07 billion in the same period of FY24.
"Remittance inflows jumped in March because of the celebration of Eid-ul-Fitr," Arief Hossain Khan, spokesperson for the central bank, told The Financial Express.
He also said people's mindset had changed after the changeover in state power on August 5 last year, encouraging them to send their hard-earned money back home through formal channels instead of unofficial ones.
"In fact, this is helping the inflow of remittance rise at a large scale, which is reflected in the recent data," said Khan, also an executive director of the central bank.
Taking to The Financial Express, another BB official said the existing upward remittance trend may continue till the end of this fiscal year as another Eid festival is set to be celebrated in early June. He also said remitters now feel encouraged to send their money through formal banking channels instead of the illegal "hundi" system, which can help boost the country's foreign exchange reserves.
Riding on the growing inflow of remittances, Bangladesh's gross foreign exchange reserves rose to $25.62 billion on Sunday from $25.44 billion on Thursday, as per the traditional calculation of the Bangladesh Bank.
However, according to the International Monetary Fund's (IMF) Balance of Payments and International Investment Position Manual - sixth edition, generally known as BPM6, forex reserves reached $20.46 billion on Sunday from $20.30 billion on Thursday.
Apart from neutralising hundi, bankers said the prevailing stable exchange rate played a key role in alluring remitters to choose formal options to send their money back home as the rate differential between banks and the kerb market is too small.
According to market players, remitters are getting a maximum exchange rate of Tk 123 a dollar from the banking system, while it is Tk 124 a dollar in the kerb market.
If the 2.50 per cent incentive that the government provides to remitters is taken into consideration, the latter is getting more money by sending remittances through banking channels than the kerb market.
siddique.islam@gmail.com
