A synchronized drive to bag more foreign currencies for stabilising Bangladesh's depleting forex reserves faces headwinds as remittance inflow so far this outgoing month shows a significant recession.
Such dip in remittance receipt -- perceivably in fallout from road ruckus stoked by campus protests at home and overseas repercussions to a large extent -- could create further stress on the country's foreign-exchange reserves.
Apparently concerned about such a deep reversal of a recent rebound in remittances, the central bank is learnt to have already verbally instructed the top executives of many commercial banks to rope in the remitters with further rammed-up exchange rate.
Officials and bankers would like to blame nationwide internet outage for five days amid waves of violence during massive job-quota protests for the downturn as the unrest disrupted the inflow of remittance alongside economic activity.
According to the latest remittance-related data with the Bangladesh Bank, Bangladeshi expatriates working in various overseas markets sent home US$1.57 billion ($1567 million) in the first 27 days of this July-far below the monthly average in recent months.
The inbound flow of remittance is basically cut significantly in fallout from the anti-quota demonstrations by students having turned violent, which comes crystal clear in the weekly analysis of the data this passing first month of the new fiscal year.
In the first 13 days of July, the country had received $979 million. In the following week (July 14 to July 20), the volume of remittance amounting to $450 million was added. But, in the subsequent week (July 21-27), when the economy was passing through complete internet blackout nationwide, the receipt plummeted to only $138 million, according to the statistics.
Seeking anonymity, a BB official said the remittance volume might decline slightly as banking operations were completely interrupted for five consecutive days for nationwide internet outage following the recent ruckus.
"Banks reopened last Wednesday and Thursday but operated for a very limited time, which is probably the reason behind the unexpected drop in remittance inflow," the official added.
The central banker wouldn't lose hope for a rebound. He expects the remittance situation will become normal once the ground reality returns to normal.
The official, however, wouldn't agree with the claim of impact of an ongoing anti-remittance campaign by a "vested quarter", at home and abroad.
The drop comes at a time when the country has been on the cusp of an increase in the volume of remittance in recent months to much-needed letup in the country's rapidly depleting forex reserves.
The monthly count of remittance was $2113 million, $2164 million, $1997 million, $2044 million, $2255 million and $2542 million in January, February, March, April, May and June of this year respectively.
Managing director and chief executive officer (CEO) of Jamuna Bank PLC Mirza Elias Uddin Ahmed says they have received least volume of remittance in very recent days. "But we expect things might reverse if we further increase the rates."
Naturally, the remittance inflow slows slightly in the first quarter (July-September) of a financial year after celebration of two Eids. "So, we need to increase the rate to attract remittance specially this season."
Managing director and CEO of Mutual Trust Bank PLC Syed Mahbubur Rahman sees the recent countrywide internet shutdown amid violence as a reason for the fall in remittance inflow.
"Once the situation cools down, we're expecting improvement in the remittance inflow," he says.
Speaking on condition of not being quoted by name, a top executive of a private commercial bank told the FE that banks were not getting the remittance even after increasing the rate unto Tk119 per dollar with the incentive (2.50 per cent) following verbal instructions from the regulator.
"As a matter of fact, the rate on the kerb market increased up to Tk 123 a dollar," he added.
After the recent onset of quota-reform movements, he said, "hundi (unofficial money-sending channel) became very active, which is posing a serious challenge for the economy ahead."
However, while they were holding hope against hope, the student protesters regrouped and staged limited demonstrations to the face of action and arrest by law-enforcers in different parts of the country and the capital on Monday.
University teachers, who have been on strike to seek pension reform, also staged solidarity squatting at Dhaka University and somewhere else.
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