In February, expatriate Bangladeshis sent home $1.78 billion, down 9.2 percent from the previous month
Remittance inflows continued to shrivel in February with the return to normalcy of air travel, which roused the informal channels for sending money back to action after an enforced hiatus for the travel ban for the global coronavirus pandemic.
In February, expatriate Bangladeshis sent home $1.78 billion, down 9.2 percent from the previous month, according to the central bank’s latest data.
However, the inflowslast month were 22.6 percent higher than a year earlier.
The collapse of the informal channels like the hundi system, an illicit cross-border transaction network, thanks to the travel ban brought on by the pandemic was one of the reasons for the record remittance received in 2020 despite migrants returning home in hordes, said Zahid Hussain, a former lead economist of the World Bank’s Dhaka office.
But now, the informal channels are recovering as most of the countries have withdrawn the travel ban.
The current trend of remittance would not sustain beyond May as there has been no new manpower export since March last year and a good number of expatriate Bangladeshis have returned home after losing their jobs, he said.
A total of 408,408 migrant workers returned home from 29 countries after they lost their jobs following the COVID-19 outbreak, according to the Bureau of Manpower, Employment and Training.
Besides, some 5.5 lakh aspirants who were expected to migrate with jobs through the normal process during the time did not have the opportunity.
Then another 1.5 lakh-odd workers could not return to their workplaces after ending their vacation at home, said migration officials and researchers.
The migrant workers had sent more money to their relatives amid the pandemic to deal with the unfamiliar situation, said Faruq Mainuddin Ahmed, managing director of Trust Bank.
“That’s the reason for record remittance last year.”
But the inflows would decline in the coming days seeing that a large number of migrant workers have packed their bags and have come back home for good, he added.
However, Zaid Bakht, research director of the Bangladesh Institute of Development Studies, has a different view.
The inflow of remittance would maintain a standard flow in the upcoming days as the migrant workers are already used to the legal channels and are enjoying the 2 percent cash incentive, he said.
As coronavirus was tearing through the globe in February last year, fear gripped Bangladesh that remittance, which has gone on to become one of the lifelines of the economy, would take a massive hit.
The inflow of remittance declined from February to April when the pandemic was putting down its roots all over the world.
But from May onwards the inflows have been on the rise as countries all over the world gradually started to ease their movement control orders to flatten the curve on coronavirus.
As per the latest Bangladesh Bank data, the country received $16.7 billion in remittance during the July-February period of the fiscal year, up 33.6 per cent year-on-year.
With the growing inflow of remittance, the country’s foreign exchange reserve reached a record high at $44.03 billion on February 25, 2021.
As a result of the latest development, the country’s reserve has increased by $11 billion since the outbreak of coronavirus, providing a large breathing room to the country.