A robust export performance coupled with remittance rebound raises hopes as, after consecutive recession, Bangladesh recorded growth in both the forex earners in November over the previous months.
Bangladesh booked the highest-ever single-month export earnings this past month with an overall US$5.09billion income, recording a 26- percent year-on-year growth as apparel shipment rebounded.
After two months' consecutive recession in remittances, the country recorded an over 4.0-percent rise in November receipt over the previous month, according to official data.
Although the monthly growth in inward remittance is not so high, sources say, it gives some sort of respite to the foreign-exchange market that is under immense stress in recent months amid reserve downturn.
The dollar-supply dearth makes the greenback costlier. As a spillover effect, the import costs keep mounting and it ultimately raises the inflationary pressure through price rises, making a strong bite on the earnings of commoners.
Latest Bangladesh Bank (BB) data show that, in the just-past month, Bangladeshi nationals working abroad sent in foreign currencies worth US$ 1.59 billion--up 4.34 percentage points compared to the earnings in October when the US$400 billion-plus economy received US$ 1.52 billion.
The expatriates remitted home US$1.55 billion in the same period of 2021.
The central bank data show that the remittance inflows started dropping in August last when the earnings came down to US$ 2.03 billion from July's US$2.09 billion. In September, the figure was US$ 1.53 billion.
Islami Bank Bangladesh Limited netted the highest volume of remittance worth US$387.15 million followed by Agrani Bank with US$ 105.71 million, Dutch-Bangla Bank US$95.82 million, Sonali Bank US$ 90.15 million, and Al-Arafah Islami Bank Limited US$80.80 million.
The ebb tide in remittance inflows emerged as a matter of serious concern for the economy which economists say is under immense stress amid Bangladesh's shrinking foreign-exchange reserves.
The local currency, BDT, has depreciated over 10 per cent since June 2022 and it might play a positive role behind the upturn as there is a common trend of increase in inward remittance whenever the local currency depreciates, according to BB officials.
Seeking anonymity, another BB official said the central bank's tightened monitoring over informal channel like hundi alongside introduction of single exchange rate for all banks started delivering the goods.
"We're hopeful that upward trend will be continuing in the coming days as a record number of Bangladeshi people find jobs in overseas markets in recent months," he adds.
The country's foreign-currency reserves continued declining over the last several months, standing at US$33.79 billion until December 1, 2022 by official count.
Terming the increase as insignificant, economists suggest the policymakers should take steps to further minimise the existing differences in exchange rates bringing innovating products on the money market to make the upturn sustainable.
Contacted for his view, Chairman of local think-tank Policy Exchange of Bangladesh Dr M. Masrur Reaz said the hike from the earnings of remittance is insignificant but it is kind of relief that the continuous fall is stopped.
"One-month data is not enough because we don't know whether it will sustain. We need to wait for minimum three months to understand the trend," he says.
The economist notes the government has recently taken some steps to discourage informal channel with lessening the difference of exchange rates that probably help allure the remitters a bit.
"We need to further minimise the difference. There is also need for innovative products on the money market for further incentivising the remitters," he suggests.
For example, he says, the government can consider an option like that the remitters can retain 15-20 per cent of their sent money in dollar that would attract the group who keep the non-essential part of their earnings in hand to get more returns if the greenback appreciates further in the coming days.
Research director of the Centre for Policy Dialogue (CPD) Khondaker Golam Moazzem suggests intensifying the BB monitoring against illegal hundi operations alongside simplifying the money-sending procedures in formal channel.
Sources in business circles say as readymade garment (RMG) industry kept its wheels rolling, even amid the global slowdown fuelled by inflation and Russia Ukraine war. The country had received $4.04 billion in total from merchandise shipments in November last year, according to the provisional data released on Thursday night by the Export Promotion Bureau (EPB).
This past November earnings also overshot the target set for the month by 17.07 per cent.
In November '22, out of the $5.09 billion, the country received $4.37 billion from RMG exports.
Besides, the overall merchandise exports during the first five months of the current fiscal year, 2022-23, also marked a growth of 10.89 per cent to $21.94 billion.
Since last September, Bangladesh's single-month export earnings had been surpassing the four-billion mark, according to the EPB data.
The overall export earnings during July-November of FY 22-23 also surpassed the set target slightly by 0.81 per cent, according to the EPB data.
The July-November earnings in FY 2021-22 were $19.79 billion.
Of the total $21.94 billion export income during the July-November period of this FY, the RMG sector fetched $18.33 billion, recording a 15.61-percent growth compared to the corresponding period of last fiscal.
The sector's earnings in July- November of FY 23 also exceeded the set target by 4.36 per cent.
The country earned $15.85 billion from apparel exports in the corresponding period of FY 2021-22.
A breakdown of the clothing-sector performance shows that knitwear subsector earned $10.11 billion from exports in the last five months, registering a growth of 12.55 per cent.
Earnings from export of woven garments amounted to $8.21 billion, up by 19.61 per cent.
Home textile exports, however, recorded about 8.0-percent negative growth to $518.63 million during the first five months of the current fiscal.
Meanwhile, jute sector, which demonstrated a positive growth throughout the last fiscal, experienced a negative growth during the first four months of this fiscal.
During the period, export of jute and jute goods dropped 11 per cent from $456.83 million to $406 million.
Earnings from agricultural items, including vegetables, fruits and dry foods, witnessed a negative growth of about 22.92 per cent. The sector's earnings stood at $428.91 million during the July-November period of FY 2022-23.
Earnings from pharmaceutical exports stood at $74.22 million, marking an 18-percent negative growth.
Bangladesh bagged $537.50 million from export of leather and leather goods in July-November of FY 2022-23, registering a 17.65-percent growth.
Export earnings from frozen and live fishes decreased 27.39 per cent to $208.27 million in the same period. According to the EPB data, export of plastic products witnessed a 41.24-percent growth to $80.59 million.
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