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Dhaka Tribune

Remittance hit a 3-year high in June

Some banks are providing rates as high as Tk112-113 for each dollar

Update : 03 Jul 2023, 10:59 PM

The Eid festival along with a higher rate for dollars has seen the highest inflow on remittance in a nearly three-year high this June.

According to official central bank figures, foreign exchange inflows from expatriate Bangladeshis through legitimate channels were nearly $2.2 billion in June, the most in the preceding 35 months.

Previously, the country saw the biggest remittance inflow of $2.6 billion in July 2020. 

According to central bank data, expatriate Bangladeshis sent $1.84 billion home through banking systems in June of last year.

Data from the central bank reveal that Bangladesh received a total of $21.61 billion in remittances in FY23, marking a 2.75% increase compared to the previous fiscal year's $21.03 billion.

According to the data analysis of Bangladesh Bank, remittance flow in June 2022 was $1.83 billion. 

In June FY23, last month, expatriates sent a total of $2.16 billion, meaning that the expatriate income has increased by about 20%. 

They sent $1.94 billion in June 2021, and $1.36 and $1.83 billion in June 2019 and 2020, respectively.

In terms of remittances, Islami Bank is once again at the top. The second-highest expatriate income was generated by the state-owned Agrani Bank. 

Following that, the private sector's Premier Bank and Trust Bank ranked second and third in terms of processing expatriate income, respectively.

High rates and Eid festival

According to bank authorities, the central bank has ceased purchasing expatriate income at prices higher than the declared price. Due to the crisis and foreign banks' debt repayment pressures, supervision was nearly halted in the preceding months. As a result, some banks purchased dollars at higher prices, bringing in expatriate income. It has resulted in an increase in total remittance income. 

As a result, some institutions are forced to sell dollars to Bangladesh Bank.

Banks in Bangladesh are permitted to pay a maximum rate of Tk108.50 against the remittance dollar, according to a recent ruling by the ABB and the Bangladesh Foreign Exchange Dealers' Association (Bafeda). 

However, despite this decision, many banks are still offering higher rates for remittances. 

Some banks are providing rates as high as Tk112-113 for each dollar of remittance.

On the other hand, insiders also said that, usually before Eid, remittance flow in the country increases. 

Ahead of Eid-ul-Azha, expatriates sent extra money to their families to buy sacrificial animals. 

Again, various organizations from middle eastern countries sent money to Bangladesh for sacrifices.

A Bangladesh Bank official earlier told Dhaka Tribune that remittance inflow has been rising since the beginning of June mainly due to Eid-ul-Azha, which the country celebrated last Thursday. 

Every year, expatriates send more money to their relatives ahead of all the major festivals.

Sarowar Hossain, assistant spokesperson of Bangladesh Bank, said: “We are overcoming the dollar crisis. Expatriate income or remittance has regained a good flow. That's why dollar reserves are also increasing in banks.”

However, Selim RF Hussain, chairman of the Association of Bankers, Bangladesh (ABB), and managing director and CEO of Brac Bank, cautioned against making predictions based on only one month's data. 

“If we observe an increasing trend in remittances after analyzing the data for at least six to nine months, we can conclude that the situation has improved. Therefore, we need to wait for a few more months to assess whether the remittance situation is indeed improving. Otherwise, it would be too early to comment,” he said.

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