Dhaka, Bangladesh (BBN)– Inward remittance grew by nearly 18 per cent to a record $18.42 billion in the just-passed 2019 for a government effort to incentivise remitters, officials said.
The figures jumped from $15.53 billion in 2018, according to the central bank’s latest statistics.
Senior bankers, however, said financial incentive along with the depreciating mode of taka against dollar has helped boost the influx in the last calendar year.
The remittance inflow was estimated at $1.69 billion in December last, up by nearly $132 million from that of the previous month.
In November 2019, the amount stood at $1.55 billion. It was $1.18 billion in November 2018.
Talking to the BBN, Kazi Sayedur Rahman, an executive director of the Bangladesh Bank (BB), said the central bank expects remittance flow to cross $20-billion mark by the end of current fiscal year (FY), 2019-20.
Mr. Rahman hoped that the upward trend in influx would continue in the coming months as the government has announced 2.0 per cent incentive for remittance receipts.
Bangladesh government allocated BDT 30.60 billion in incentive in the budget for FY ‘20 to encourage migrant workers to send their money back home through legal channels.
The central banker’s expectation has come against the backdrop of a falling trend in outbound jobs of Bangladeshis in recent months.
This downtrend in overseas employments is because of a lower demand for workers in the Middle-Eastern countries, according to insiders.
More than 600,000 workers have found jobs in the last 11 months to November 2019 against 684,962 workers in the same period last year, showed the official figures.
Some important destinations like the United Arab Emirates, Malaysia and Bahrain have remained closed for Bangladeshi workers for long, they explained.
More than 12 million Bangladeshis went abroad since 1976, the official data disclosed.
“The depreciating mode of the local currency against dollar also pushed up the flow of inward remittances in 2019,” MA Halim Chowdhury, managing director (MD) and CEO of Pubali Bank Limited, said.
The local currency’s exchange rate depreciated significantly against dollar in recent months mainly due to a higher demand for greenback to settle import bills.
Meanwhile, the Bangladesh Taka (BDT) depreciated by BDT 1.0 against dollar in the inter-bank forex market from January 02 to December 30.
Greenback was quoted at BDT 84.90 each on December 30 against BDT 83.90 on January 02.
Mr Chowdhury also said the government’s incentive is encouraging non-residence Bangladeshis to remit their hard-earned money using banking channel instead of illegal “hundi” system.
“The uptrend in inward remittance may continue in the coming months following the government’s incentive and BDT’s depreciating mode against the greenback,” Md Ali Hossain Prodhania, MD of Bangladesh Krishi Bank, explained.
Syed Mahbubur Rahman, MD and CEO of Mutual Trust Bank Limited earlier urged the BB to strengthen supervision to avoid possible misuse of such incentive as well as any unwanted situation.
The central bank earlier took multiple measures to encourage the expatriates to send their money through the formal banking channel only to help boost the country’s foreign exchange reserves.
Bangladesh’s forex reserve rose to $32.75 billion on Wednesday from $32.57 billion on the previous working day.