Unlike usual Eid surge in inflow of money from expatriate Bangladeshis, inward remittance this time recedes as March receipts even dropped down the US$2.16-billion mark of the previous month.
The total remittance receipt in the month was US$1.99 billion even though the major part of the peak Eid season ends, to the surprise of custodians of the exchequer that rather needs higher to ramp up the country's depleting foreign-exchange reserves.
Naturally, inflows of remittance go up on the occasion of Eid but the trend runs reverse this time, concerning bankers and money-market analysts amid existing forex dearth.
According to latest data with Bangladesh Bank (BB), the expatriates sent home a total of $1.99 billion in remittances in the just-past March, which is 1.23-percent lower compared to the same period of last year.
In March 2023, the country received remittance worth $2.02 billion.
Seeking anonymity, a BB official says the flow of inner remittance normally rises largely ahead of key religious festivals in the Muslim-majority Bangladesh, like Eid-ul-fitr and Eid-ul-Azha, as remitters send big chunks of money for their families to celebrate the festivals.
"So, we expected more remittance this March like on the previous occasions. But, unfortunately, the flow dropped in March when the holy Eid-ul-fitr is a week ahead," says the central banker on a downbeat note.
According to the BB data on the previous three Eid-ul-fitr months, the country received remittance worth $2.02 billion in March in 2023, $2.01 billion in April in 2022 and $2.07 billion in April in 2021.
Receipts were down by 7.87 per cent in March compared to February's when the inflows reached $2.16 billion, according to the Bangladesh Bank statistics.
Inclusive of the latest March count, the country in the first nine months of the fiscal (FY'24) received $17.07 billion in remittance. In the previous FY'23, the volume was $21.61 billion.
The central bank, in its quarterly report (July-September), identified informal hundi channel as one of the major factors contracting the remittance inflows.
The report also stated that despite the rise in migrant workers' numbers in Gulf and Middle-East countries, the amount of remittance inflows decreased in the first quarter of the current fiscal year (2023-24) due to active informal channels/hundi.
Industry-insiders also attribute the decline to the growing use ofe hundi system since remitters get better rates in exchange for the US dollar if they transfer the funds through the illegal cross-border system instead of formal channels.
A recent drive busted a dollar syndicate at the airport in Dhaka that was accused of buying foreign currencies from incoming passengers and most siphoning off the country.
Managing director and chief executive officer of Dhaka Bank Emranul Huq says the inflow was supposed to increase in the immediate-past month of March but it didn't.
"The reasons behind the fall need to be well-assessed and act accordingly so that we can avoid the fall in the coming Eid-ul-Azha," he suggests.
The experienced banker also pinpointed two probable factors. These are the growing activities of hundi operations to bag more forex ahead of Eid and the tendency of remitters to keep their hard-earned money in hold to get more returns in days ahead.
"I hope the flow would go up in the next few days of this month (April) just before the Eid," he adds.
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