Bangladesh saw remittance inflow drop nearly 12 per cent in February mainly as working days of the expatriates in different countries squeezed, officials say.
Bangladeshi nationals working abroad sent nearly US$1.50 billion in February last, according to the central bank latest statistics released Tuesday.
The amount was $208.44 million lower than the remittance earning-a main source of the country's foreign-exchange reserves--in the previous month. In January 2022, the inflow of remittance was $1.70 billion.
However, the inward flow of remittance dropped by nearly 16 per cent or $284.50 million, year on
year, as expatriates sent $1.78 billion in the same period of 2021.
"Fewer working days pushed down the inflow of remittances slightly in February," Kazi Sayedur Rahman, deputy governor of the Bangladesh Bank (BB), told the FE while explaining the latest trend in inward remittance.
The deputy governor expects the remittance receipt to increase in the coming months, ahead of the Holy Ramadan and the Eid-ul-Fitr festival.
The official figures also show that the inward flow of remittance dropped more than 19 per cent to $13.44 billion during the July-February period of the current fiscal year (FY), 2021-22, from $ 16.69 billion in the same period of the previous fiscal.
Market-insiders, however, say the inflow of remittance decreased as money transfers through informal channels such as 'hundi' might have resumed because of higher import payments along with the ease of pandemic restrictions.
Hundi normally links with under-invoicing of imports, according to the insiders.
Besides, gap between formal banking-channel exchange rate of the US dollar against the Bangladesh Taka (BDT) and kerb market encouraged illegal 'hundi' activities, they add.
Asked about allegation of 'hundi' operations, a senior official of the BB told the FE: "We're watching the overall inward-remittance activities closely."
Echoing the BB officials' views, managing director (MD) and chief executive officer (CEO) of Dhaka Bank Limited Emranul Huq said the inflow of remittance may increase in the coming months as the Holy Ramada and the Eid-ul-Fitr festival are coming up.
"The flow of inward remittance normally decreases before each Holy Ramadan and Eid-ul-Fitr festival," the senior banker explained.
He also says the remitters may feel encouraged further for remitting their hard-earned money through official channel as the government has increased the incentives for remittance receipts
Meanwhile, the government has raised the cash incentives on remittance to 2.5 per cent from 2.0 per cent earlier, aiming to encourage the remitters for sending their money through official channels instead of the illegal "hundi" system.
Effective from January 01, the new rate is a New Year's gift to the remitters from the Prime Minister, according to a statement issued by the finance ministry earlier.
Currently, 29 exchange houses are operating across the globe along with nearly 1500 drawing arrangements set up abroad to boost the remittance inflow, according to the BB officials.
The central bank had earlier taken a series of measures to encourage expatriate Bangladeshis to send their money through the formal banking channel instead of 'hundi' conduit in order to boost the country's foreign-exchange reserves.
