Remittance inflows to Bangladesh surged by 21.31 percent year-on-year to reach $2.04 billion in April, buoyed by the approaching Eid-ul-Fitr, a significant religious festival for Muslims, during which migrant workers traditionally send more money back home.
Simultaneously, industry insiders attribute the rise in remittance inflows to certain banks offering higher rates than the official ones for remittance collection.
April’s receipts also outpaced those of the previous month by 2.31 percent. In March, Bangladesh received $1.99 billion in remittances, as per central bank data.
A senior official from the Bangladesh Bank noted that expatriates sent substantial remittances in the two weeks leading up to Eid, contributing significantly to last month’s surge. Additionally, the central bank’s leniency towards banks regarding remittance collection played a role in boosting inflows.
Banks are permitted to offer a maximum of Tk 114.5 per US dollar, inclusive of the Tk 2.5 government incentive, yet some are offering up to Tk 120 per dollar, according to banking sources. The official exchange rate stands at Tk 110.
In April, the highest remittance amount was channeled through Islami Bank, totaling $541.25 million, followed by Social Islami Bank with $148.23 million, BRAC Bank with $121.51 million, Janata Bank with $111 million, and National Bank with $110.18 million, according to data.
Conversely, some banks failed to attract any remittance inflow in April.
Officials from commercial banks expressed dissatisfaction with the remittance inflows, given the record number of workers sent abroad for jobs in 2023, reaching 13.05 lakh, a 15 percent increase year-on-year, according to data from the Bureau of Manpower, Employment and Training.
The remittance inflow in March was $1.99 billion, down from $2.16 billion in February and $2.11 billion in January, according to central bank data.
Bankers anticipate that remittance inflows will continue to rise in the coming months, providing a reprieve for the government by bolstering foreign exchange reserves.
As of April 30, forex reserves stood at $19.95 billion, down from $20.10 billion on April 8. The decline in forex reserves since August 2021 is attributed to various factors, including higher outflows compared to inflows.
