A file photo shows a man counting US dollar notes at a currency exchange office in the capital Dhaka. — New Age Photo
Remittances rose 12.57% to $2.03 billion in August, the second month of the current fiscal year 2022-23, from $1.81 billion in July of the fiscal year 2021- 22, according to Bangladesh Bank data released on Thursday.
In July 2022, expats sent home $2.09 billion through banking.
The July influx was the highest after May 2021, when expats sent $2.17 billion.
Remittances have been on an upward trend over the past two months.
BB officials said remittances had increased as the government increased cash incentives on remittances.
On January 1, the government increased the cash incentive on remittances to 2.5% from 2% to encourage migrants to send more money through the formal channel.
Considering the shortage of dollars in the market, the Bangladesh Bank recently issued a circular stating that expatriates do not need to present any documents to send money to the country.
The central bank recently raised the US dollar interbank exchange rate to 95 taka.
However, some banks accept remittances at a higher rate of 100-4 Tk, which was very lucrative for non-resident Bangladeshis.
Thus, expatriates chose the banking channel to send more funds.
The government and the Bangladesh Bank have also taken various measures to prevent remittances through informal channels which have also contributed to the recent surge in remittances, BB officials said.
In the first two months (July and August) of the 2022-23 fiscal year, expats sent a total of $4.13 billion while they sent $3.68 billion in the same period of exercise 22.
The country’s economy is struggling for a number of reasons, including rising inflation, record trade deficit, energy crisis, declining reserves and currency volatility.
The foreign exchange reserve fell to about $39.05 billion in August from $48 billion a year earlier.
Businesses are grappling with the dollar crisis and failing to settle LC payments due to shortages of foreign currency, officials said.
Thus, the increase in remittances in July and August would reassure companies.
In FY22, the inflow fell to $21.03 billion from $24.78 billion in the previous fiscal year 2020-21, causing panic in the financial market.
Bangladesh received the highest remittance transfer of $24.77 billion in the 2020-21 financial year amid global travel restrictions amid the Covid pandemic.
In August, six public banks received $363.49 million in inbound transfers, two specialized banks received $24.26 million and 41 private commercial banks received $1,642.53 million while nine foreign commercial banks received received $7.52 million, according to BB data.
Among the banks, Islami Bank Bangladesh received the highest amount, $430.09 million, followed by City Bank $141.53 million, Agrani Bank $132.37 million and Pubali Bank $114 million.
In FY19 and FY20, remittances were $16.42 billion and $18.21 billion, respectively.