Bangladesh received $2.22 billion in remittances in August, in a year-on-year rise by 39 per cent, according to the latest monthly data that bring some solace about forex reserves.
With the higher remittance inflow, as per the statistics Bangladesh Bank (BB) released Sunday, the country's foreign-exchange reserves increased a bit to stand at $20.60 billion on August 28, 2024 from $20.49 billion recorded on July 31 in accordance with IMF arithmetic.
At the end of last May, the reserves had depleted to $18.72 billion.
In August a year ago, Bangladeshi people working abroad had sent home in official channels $1.6 billion in remittances, the central bank data showed.
The rebound in remittance earnings provides some respite for the economy facing multiple macroeconomic strains amid persistent foreign-exchange shortages, officials and analysts say.
In comparison with the monthly remittance earnings in July 2024, the August count of $ 2.22 billion is also higher by 16 per cent as the country received $1.91 billion in July.
Seeking anonymity, a BB official said the central bank took some proactive measures to boost inflow of foreign currencies, like massive depreciation of the local currency against the US dollar, which encourages remitters to send more money home.
"And we see the impact. This is a positive sign for the economy, which is currently under stress due to foreign-exchange shortage," the central banker said.
Senior bankers also appreciate the outcome of remittance-boosting baits and the outcome.
Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank (MTB) PLC, says an increased number of people left the country for overseas jobs in recent months while the banks offered better incentives to rope in the remitters.
As the volume of export receivables comparatively falls, he notes, the commercial banks intensified their efforts to bag more remittances offering better incentives to meet import-payment liabilities.
Simultaneously, Mr Rahman adds, the exchange rate has gone up remarkably because of latest appreciation of the US dollar against the taka that encourages remitters to send more money home.
"We have seen some stability in remittance earnings in recent months," the experienced banker told the FE. "I hope this continues."
Mirza Elias Uddin Ahmed, managing director and chief executive officer of Jamuna Bank, says the remitters, buoyed by handsome exchange-rate gains, continue transferring increased volume of funds in recent times, which is helping stabilise the forex market.
Majority of the banks have surplus US dollars because of growing inflow of forex and started resuming LC (letter of credit) opening, which is a "good sign".
"But, we need to keep the trend going in the coming days," the bank's top executive says.
A top executive of a commercial bank, who preferred to be anonymous, notes that some banks, notwithstanding their poor fundamentals, are getting significant volumes of remittance, which is "surprising".
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