After years of fluctuations, Bangladesh's remittance income has finally shown notable stability.
In June, the final month in FY24, the country received a record $2.54 billion in remittances, the highest in 47 months.
The last peak was in July 2020, when expatriates sent $2.59 billion, coinciding with the Eid festival.
The recent months have seen a surge in remittance inflow, with earnings surpassing $2 billion consecutively in April, May, and June.
The months of April and May recorded $2.04 billion and $2.25 billion respectively.
According to the latest data released by Bangladesh Bank on July 1, expatriates sent a total of $23.92 billion in inward remittances during the recently concluded fiscal year 2024 (FY24), with $2.54 billion arriving in June alone.
This marks the highest remittance inflow in the past three years.
Data shows the remittance inflow for the previous fiscal years: $18.20 billion in FY20, $24.77 billion in FY21, $21.03 billion in FY22, and $21.61 billion in FY23.
Bankers attribute the significant remittance inflow in June to expatriates sending more money to their relatives for Eid-ul-Adha celebrations.
It is customary for expatriates to remit more funds during Eid than any other time of the year, and this year's Eid-ul-Adha, celebrated on June 17, followed this trend.
The remittance economyHowever, there are varied opinions within the banking sector regarding the rising trend in remittances.
While some view it as a positive economic indicator, others raise concerns about its sustainability and the underlying factors driving this increase.
Experts suggest that much of the money previously smuggled out of the country is now being repatriated as remittances.
Additionally, banks are offering higher dollar rates for remittances, encouraging expatriate Bangladeshis to send money through formal channels. This has led to a steady increase in remittance inflows.
A banker, speaking anonymously to Dhaka Tribune, noted that a rise in remittances during festive months, especially Eid, is typical.
Especially since Bangladesh Bank has relaxed its oversight on setting the dollar's price.
“There are also fewer restrictions on bringing cash into the country now, which has positively impacted remittance income,” the banker added.
In May, $2.25 billion came through banking channels. During this month, Bangladesh Bank raised the dollar rate by Tk7, bringing it to Tk117.
Although the official rate is Tk117, banks have been buying dollars from expatriates at rates between Tk118 and Tk119.
Higher dollar rates offered by banks have resulted in more dollars being received from expatriates.
These banks then sell the dollars to other banks at higher prices, which importers have to pay.
Occasionally, Bangladesh Bank also buys dollars from these banks to bolster foreign exchange reserves.
As of June 27, 2024, foreign exchange reserves have increased to $27.15 billion.
