July remittance inflow drops 6.0pc to $1.97b

Remittance sent home by overseas Bangladeshis fell by nearly 6.0 per cent to US$ 1.97 billion in July, the first month of the current fiscal year, 2023-24, according to the Bangladesh Bank's (BB) latest figures.
It was $2.09 billion in July 2022. However, the remittance fell by more than 10 per cent from that of June 2023.
BB assistant spokesperson Md. Sarwar Hossain told the FE that the remittance inflow during the first month of the current FY stood at $1,973 million.
The Bangladeshi expatriates working abroad sent a record amount of remittance, $2.2 billion (approximately), in June due to the holy Eid-ul-Azha, the second biggest festival of Muslims.
Experts opined that the expatriates sent a large amount of money during the Eid festival to purchase cattle and meet other family expenses. The experts also blamed capital flight from abroad.
Dr. Ahsan H. Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), told the FE: "The occurrence of capital flight has increased following volatility in the global market. This is happening in the Middle-East economies."
Bangladesh is not getting the expected level of remittance following a sharp difference between the formal and informal channels.
"We had $2.0 billion remittance inflow on an average in FY 2021, which has now lowered. But at least two million people have left the country to work abroad since FY 2021," said Dr. Zahid Hussain, former lead economist of the World Bank.
"We are not getting the benefit of the increased number of Bangladeshi people living and working abroad."
"We need to make the exchange rate market-based to attract people to send money through the formal channel," he noted.
Dr. M. Masrur Reaz, chairman of the Policy Exchange of Bangladesh, told the FE that many people are now holding cash, as they are expecting more devaluation of the local currency.
"To my mind, the expatriates are now holding their fund, as they think that Bangladesh will further depreciate Taka," he added.
Remittance inflow is very important for economy, as it helps stabilise the country's foreign exchange reserve, which is now at $23.3 billion as per the IMF's BPM6 calculation formula.
Besides, the money that the expatriate Bangladeshis send home to their families is one of the leading sources of dollar, rivaled only by garment export.
Currently, more than 15 million or around 9.0 per cent of Bangladesh's total population live and work in around 100 countries.

jasimharoon@yahoo.com