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Strong dollar prompts remittance to increase by 10% in 8 months

  • Published at 10:43 pm March 4th, 2019
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Monthly remittance inflow posted a healthy growth of 14.68% in February

Amid depreciation of the taka against the dollar, inflow of remittances rose by 9.94% in July-February in the current fiscal year compared with that of the same period of last year, which prompted expatriate Bangladeshis to send money home.

Bangladesh Bank data released on Sunday showed remittance inflow rose to $10.40 billion in the first eight months of the fiscal year 2018-2019 against $9.46 billion in July-February of FY18.

Monthly remittance inflow posted a healthy growth of 14.68% in February rising to $1.32 billion from $1.15 billion in February a year ago as the taka lost more grounds against the dollar in the month.

Remittance inflow started to pick up pace in recent months due mainly to transfer of fund by the expatriates through the legal banking channel amid rising value of the dollar.

Bank officials said that the exchange rate gap between the illegal channel or hundi and the legal channel had declined in recent months.

According to Bangladesh Bank data, the interbank exchange rate of a US dollar increased to Tk84.15 on Sunday from Tk83.95 at the beginning of February.

In last the two years, the taka was devalued by 6.88% against the dollar as the interbank rate of a dollar was Tk78.7 in January, 2017. 

“The flow of remittances into the country shows upward trend in the current fiscal 2018-19 as the BB has taken measures to streamline the legal channel for encouraging Non Resident Bangladeshis (NRBs) to send money to the country,” Bangladesh Bank Chief Spokesperson M Serajul Islam told BSS.

He said the recent flow of remittance indicates that it is gradually increasing and this trend is likely to continue in the upcoming months.

According to the BB data, the country received $1,317.73 million in February, $1,597.21 million in January, $1,206.91 million in December, $1,180.44 million in November, $1,239.11 million in October, $1,139.66 million in September, $1,411.05 million in August and $1,318.18 million in July of the fiscal 2018-19.

But in 2017-18, the country got $1,149.08 million in February, $1,379.79 million in January, $1,163.82 million in December, $1,214.75 million in November, $1,162.77 million in October, $856.87 million in September, $1,418.58 million in August and $1,115.57 million in July.

In February this fiscal, six state-owned commercial banks—Agrani, Janata, Rupali, Sonali, Basic and BDBL—received $280.87 million while one state- owned specialised bank- Bangladesh Krishi Bank- received $15.01 million.

Of the state-owned banks, Agrani Bank received $113.77 million, Janata Bank $70.48 million, Rupali Bank $14.89 million, Sonali Bank $81.67 million and Basic Bank received $0.06 million.

Besides, the expatriates have sent $1,011.07 million through private commercial banks. Among the private commercial banks, Islami Bank Bangladesh Limited (IBBL) received the highest amount of $206.78 million where as Dutch- Bangla Bank (DBBL) received $140.90 million.

On the other hand, the expatriates have sent $10.78 million through the foreign commercial banks.

IBBL Deputy Managing Director Abu Reza Mohd Yeahia said the inflow of remittance is increasing day by day as the authorities concerned, including banks, are accelerating their activities to bring back the remittances through the legal channel.

“We are trying to make easier the process of legal channels to expedite the remittance flow. We are signing agreements with different exchange houses to bring the remittances in automated ways,” he added.

Bank officials also said that the central bank’s move to prevent remittance inflow through the illegal channels, including mobile financial services, was among other reasons for the rise in remittance inflow in recent months. 

Expatriates’ remittance sending posted 17.39% rise in the fiscal year of 2017-2018.

In FY18, they sent $14.98 billion, the second highest, considering the country’s highest remittance receipt of $15.31 billion in the fiscal year 2014-2015.

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