One of the driving forces of the economy is expatriate income. Despite being on the rise for several months, the remittance flow has suddenly collapsed. The amount of foreign currency coming into the banking channel has further decreased in the just-ended month of October, following the decline in the month of September.
A review of the data shows that there has been a decline of about 7.5 percent compared to the same period last year. This has collapsed so much that the amount of expatriate income in October is the lowest in the last eight months. This information emerged from a report released by Bangladesh Bank on Tuesday.
It shows that in October, the fourth month of the 2022-23 fiscal year, expatriate Bangladeshis sent 1.52 billion US dollars (1.52 billion) in remittances to the country through banking channels. This figure of expatriate income is 14.17 million or 14.1 million dollars less than in the previous month of September.
And 121.4 million dollars or 7.37 percent less than the same period last year. In October last year, remittances came in at 1.6468 million dollars. In addition, eight months ago, in February this year, remittances of 1.49 billion dollars came into the country.
Data analysis shows that expatriates have sent more than $2 billion in remittances legally in the past two months of the current fiscal year. In August, remittances worth $2.03 billion were received.
The previous month, July, saw $2.0963 billion. In July, a huge amount of expatriate income came to the country due to the holy Eid-ul-Azha. However, there was no big festival in August, yet expatriate income exceeded $2 billion. But in September, it collapsed. In one fell swoop, about $500 million was lost.
Despite various efforts, the expatriate income sector has not been able to recover from the shock. Analysts say that the crisis created in the country's dollar market by increasing the prices of goods and money laundering is affecting the flow of remittances through legal channels.
Taking advantage of the crisis, the hundi cycle has become active. And due to high inflation, expatriate Bangladeshis are sending money outside banking channels in the hope of more money.
According to the Central Bank, remittances worth 307.2 million US dollars were received through five state-owned commercial banks in October.
1.186 billion US dollars came through private banks. 7.1 million US dollars came through foreign banks. And 25 million US dollars came through a specialized bank.
During the period under review, the largest remittances came through private Islamic banks, as usual. Expatriates sent $358.4 million through this bank.
Then, state-owned Agrani Bank received $106.4 million, Sonali Bank received $89.4 million, Dutch-Bangla Bank received $86.5 million, and Al-Arafah Islami Bank received $84.8 million. During the period under review, no remittances were received through government-owned BDBL, Rajshahi Krishi Unnayan Bank, Bengal Commercial Bank, Community Bank Bangladesh Limited, foreign banks Al-Falah, Habib Bank, National Bank of Pakistan, Standard Chartered Bank, and State Bank of India.
Incidentally, despite the incentives and the increase in the dollar price, there was a big decline in expatriate income in the 2021-22 fiscal year. According to the central bank, in the 2021-22 fiscal year, expatriate Bangladeshis sent remittances of 2,103.17 crore (21.3 billion) US dollars to the country through banking channels, which is 15.11 percent less than the previous fiscal year. In the 2020-21 fiscal year, expatriates sent remittances of 2,477.77 crore (24.77 billion).
Several steps have been taken to bring in remittances legally, including increasing the price of the dollar. Now, no documents are required to send any amount of remittance from abroad. In addition, the government is providing incentives at a rate of 2.5 percent on expatriate income.
To resolve the dollar crisis and increase expatriate income, commercial banks are setting the dollar price themselves. The bank executives' organization Association of Bankers Bangladesh (ABB) and Bangladesh Foreign Exchange Authorized Dealers Association (BAFEDA) set this price at a joint meeting. Recently, under the instructions of Bangladesh Bank, banks have also decided to collect remittances at the exchange house's equivalent of 107 taka.
According to the price announced by Bafeda, from now on, banks will be able to buy a maximum of 107 taka per dollar for remittances sent by expatriate workers through banking channels in the country. According to Bangladesh Bank, the interbank rate against the dollar yesterday was 104 taka 35 paise at the highest and 103 taka 10 paise at the lowest.
