Remittance rebound rekindles hope amid falling reserves

An inward remittance rebound of late rekindles hope for Bangladesh's falling foreign-exchange reserves that cast adverse domino effect on overall economy and living, officials say.
As the forex dealers and commercial banks continue raising value of the local currency against the US dollar in recent times, the remitters, who hold foreign currencies on assumption of further rise in exchange rate, might start sending the funds in banking channel, leading to the upturn, according to them.
In the first 22 days of this month of December, Bangladeshi people doing overseas jobs sent US$1.57 billion, higher than the receipt in the corresponding period of last month when the figure was around $1.40 billion, according to the latest statistics of Bangladesh Bank (BB).
During these 22 days, over $1.37 billion flowed in through the private commercial banks followed by $139 million through state-owned commercial banks, $54.72 million through specialised banks and $4.33 million through foreign banks.
However, nine banks reported no remittances netted so far this month.

Seeking anonymity, a BB official said the trend in inward remittance through the banking system is on the rise, which is "a good sign" for the country, especially at a time when the economy passes through tough times because of forex dearth.
During the 22 days, the country daily received $71.34 million from the remitters through the formal channel. "If the trend continues in the remaining nine days, the December count of remittance will cross $2.20 billion, which will be the highest in very recent years," the central banker says.
The exchange rate of the greenback against the taka has gradually been allowed to appreciate in recent months until October 2023, and it probably prompted many of the remitters to hold the foreign currencies in hand to gain more.
"But later last month (November), the Bangladeshi taka continues appreciating. So, the remitters might be in fear of further lose of the price and start releasing the funds," the BB official adds.
Alongside the fact of exchange-rate dynamics, says managing director and CEO of Dhaka Bank Limited Emranul Huq, the demand side of the forex is also on the downturn. "As the demand falls, the remitters are now sending more remittance through the banking channel."
The experienced banker notes that Bangladesh normally observes comparatively more social gatherings, including marriage functions, in the winter season which basically starts from the month of December.
"If we look around us in this season, we will find such functions almost everywhere now. Many remitters, especially in the rural areas, send more money on that purpose for their families. I think it could be another reason behind the surge in inward remittance," Mr. Huq says.
[email protected]