Remittance inflow from USA almost halves in Jul-Aug

Remittance inflow from the United States fell by nearly 49 per cent in July-August period of the current fiscal year from that of the same period of the last FY apparently due to volatility in the local foreign exchange market.
Bangladesh received only US$370.27 million in the first two months of FY 2023-24, which is 48.65 per cent lower than $721.07 million received during the same period of FY 2022-23 from the USA, latest official data showed.
Economists attributed the substantial drop in remittance inflow to a big gap of taka-dollar exchange rates in the local formal and informal markets.
Expressing concern over the sluggish inflow, they said that a speculation over further depreciation of local currency might have held back the remitters to hold their earnings and send home the money at a time when they would get even better rates.
They, however, rejected an apprehension that the current US-Bangladesh relations might have affected the wage earners' remittance inflow.

The lower inflow in the last couple of months has placed Bangladesh at the 4th largest remittance recipient country from the world's largest economy as compared to its 2nd position in the previous two consecutive FYs.
The remittance inflow from the USA, however, posted a little growth in FY 2023 from that of FY 2022.
According to the Bangladesh Bank data, remittance inflow from expatriate Bangladeshis in the USA increased by 2.43 per cent to US$3.52 billion in FY 2023 from that of $3.44 billion in FY 2022.
However, the monthly inflow started losing its steam since the beginning of this FY2024. The August receipts of $170.27 million was lowest in 14 months while the July position ($200 million) was little better than August, but lower than any month in the last FY.
The USA was the second largest remittance sourcing country for Bangladesh over the last three consecutive years in FY2021, FY2022 and FY2023 as it recorded a better growth than in the FY2020, the central bank data showed.
On a yearly basis, the remittance inflow from the USA was counted at $2.40 billion three years ago in FY2020.
It started to rise in the next few years as recorded at $3.46 billion in FY 2021, $3.44 billion in FY 2022, and $3.52 billion in FY 2023, the BB data showed.
Foreign remittance has also dropped from three other largest sourcing countries -- Saudi Arabia, Malaysia and Italy, BB statistics showed, but the intensity was less than that of the USA.
Saudi Arabia is the largest remittance source for Bangladesh.
Remittance inflow from Saudi Arabia dropped 13.38 per cent to $598.86 million in July-August period of FY 2024 from that of $691.35 million in the correspondent period of the last FY.
From Malaysia, it fell by 18.86 per cent to $199.92 million during the period under review while it dropped 12.36 per cent to $224.87 million from Italy.
The remittance inflow from some other source countries like UAE, Qatar, Kuwait, UK and Oman also dropped slightly.
Bangladesh's overall remittance in the first two months of the current fiscal year dropped 13.56 per cent to $3.57 billion from that of $4.13 billion in the same period of FY2023, the BB data showed.
Former Lead Economist at the World Bank's Bangladesh office Dr Zahid Hussain told the FE that the current Bangladesh-US relations may not have affected the remittance inflow.
It may have been affected by the increased transactions in the informal market due to a wide spread (Tk6.0-8.0) between the exchange rates in the formal and informal markets, he said.
In addition to the capital flight, visa fee (informal) payments by the increased number of migrants and the USD exchange control by the government in the local market had affected the remittance inflow from different destinations, including the USA, Dr Hussain added.
Chairman of the Policy Exchange Bangladesh Dr Mashrur Reaz said that the higher USD rate and speculation over further depreciation of taka have affected the remittance inflow.
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