Inflow of remittance dropped for four consecutive months in September although the number of overseas employment started to increase in 2021 compared with the previous year amid reopening of the major destinations for the migrants.
The country’s remittance earnings dropped by 4.63 per cent or $83.81 million to $1.73 billion in September from $1.81 billion in August, the latest Bangladesh Bank data showed.
The remittance inflow was $2.17 billion in May 2021. The figure subsequently dropped to $1.94 billion in June and $1.87 billion in July.
In the July-September quarter of 2021, the inflow of remittance dropped by 19.44 per cent or $1.31 billion compared with the same period in 2020.
The country fetched $5.41 billion in Q1 of FY22 against $6.71 billion in the same quarter of FY21.
The country received $21.75 billion in remittance in 2020 when the number of Bangladeshi nationals employed overseas dropped to 2.17 lakh from seven lakh in the previous year.
The inflow of remittance reached a record high of $2.6 billion in July of the year.
The Bureau of Manpower, Employment and Training data showed that remittance earnings in the seven months of 2021 stood at $13.71 billion against overseas employment of around 2.7 lakh Bangladeshi national during the period.
Some migration experts mentioned that traders of hundi, an illegal way of transferring money that helps money laundering, came to a halt following the Covid outbreak due to movement restrictions in the migration destinations.
Bedsides, a portion of foreign currency retained by the hundi traders are being used to clear import payments, they said.
They said that the country’s import payments had a negative relation with remittance earnings since a portion of the country’s remittance earnings were being used to clear import payments as a means of money laundering.
Besides import payments through the formal channel, a large portion of remittance earnings are being used to clear payments against under-invoiced products, experts said.
In July-October of FY22, the central bank sold around $1 billion on the interbank money market to contain appreciation of the dollar amid a sharp increase in import payments.
Former National Board of Revenue chairman Muhammad Abdul Mazid, however, recently told New Age that answers were needed as to why the country’s remittance earnings had been on the decline at a time when overseas employment of the country’s workers had increased and normal activities at the destinations where they were migrating had resumed.
The central bank should scrutinise why the inflow of remittance increased in 2020 when migration from the country dropped sharply, he said, adding that the digging out of the cause would help them to understand the real situation.
Otherwise, it would not be possible to understand who were benefitting from the incentive against remittance, he said.
As per the BB data, Islami Bank Bangladesh brought the highest $461.61 million in remittance to the country followed by DutchBangla Bank which brought $203.64 million, Agrani Bank $148.79 million and Sonali Bank $111.18 million.
Although the country’s trade deficit reached a record high in FY21, the country managed to take its foreign exchange reserve to $48 billion in August from $33 billion before the coronavirus outbreak started in the country.
