Dhaka, Bangladesh (BBN) – The inflow of remittances reached US$1.75 billion in May before the Eid-ul-Fitr festival, highest ever the country received in a month, officials said.

The remittance inflow was estimated at $1.75 billion in May, up by 321.72 million the month before. The amount was $1.50 billion in May 2018.

Talking to the BBN, a senior official of the Bangladesh Bank (BB), the country’s central bank, said the May remittance set a new record in the history of Bangladesh.

Non-resident Bangladeshis (NRBs) normally send increased amount of remittances to help the relatives and families left behind celebrate the Muslims’ Eid-ul-Fitr festival.

He also said such a higher inflow of remittance leaves a positive impact on the existing flexible exchange rate policy.

“The exchange rate of Bangladesh Taka (BDT) against the US currency in the banking channel is almost equal to the kerb market,” the central banker explained.

Senior bankers, however, said the flow of inward remittance showed an upward trend in recent months due to the depreciation of the local currency against the US currency.

The higher demand of the greenback for settling the import bills caused the depreciation.

The local currency depreciated by 60 poisha against the greenback in the inter-bank forex market from January 03 to May 06.

The greenback was quoted at BDT 84.50 each in the market on May 06 against BDT 83.90 on January 02 this calendar year, according to market operators.

It also remained unchanged at BDT 84.50 on Monday.

Strengthening the central bank’s surveillance to check hundi, the illegal channel used to move funds across borders, has helped increase the flow of inward remittances, another central banker explained.

Meanwhile, the inflow of remittance grew by nearly 11 per cent or $1.46 billion to $15.06 billion during the July-May period of the fiscal year (FY), 2018-19 from $13.60 billion in the same period of the previous fiscal, the BB data showed.

The overall flow of inward may cross $16 billion by the end of this fiscal, the central banker predicted.

Currently, 29 Bangladeshi exchange houses are operating across the world along with more than 1,200 drawing arrangements abroad to boost the remittance inflow, according to BB official.

On the other hand, the inflow of remittance may fall this month. But it will increase again in July, according to a senior executive of a leading private commercial bank said.

Official channel is becoming popular among the people of remote areas across the country as some banks extend their services through setting up agent banking, he added.

He also said better exchange rate has also encouraged expatriate Bangladeshis to send their hard-earned money through the formal banking channel instead of illegal “hundi” system to help boost the country’s foreign exchange reserve.

Bangladesh’s forex reserve rose to $31.40 Monday from $31. 34 billion of the previous working day, despite $20 million sold to two state-owned commercial banks (SoCBs) for making import payment bills against petroleum products.

An estimated 10 million Bangladeshis are currently working abroad, primarily as low-skilled laborers in the Arabian Gulf. Only India, Mexico, Russia and China send out more migrant workers each year according to the World Bank.

The Bangladeshi migrant workers are gardeners, construction workers, janitors and maids.

On average they earn $400 a month, far more than they’d make doing the same jobs at home. And the totals add up. The $15 billion sent home by migrant workers in the FY 18.