Remittance hits record $22.7bn in 11 months

Anisul Islam Noor

2 June, 2021 12:00 AM printer

Bangladesh’s inward remittance has hit a record $22.74 billion in 11 months of the current fiscal, posting a 39.49 per cent growth over the same period a year ago.

The country’s forex reserves have also reached $45.05 billion thanks to the robust growth in remittance inflow and a fall in imports amid the Covid-19 pandemic.

Finance Minister A H M Mustafa Kamal has said the cash incentive against remittance transfers has been playing a major role in boosting the remittance inflow.

He has also hinted that cash the incentive will continue in the next fiscal and allocation for the incentive may increase further.

In May 2021, Bangladeshi expatriates have sent home $2.17 billion, up from $1.622 billion in May 2020.

Bangladesh received $18.205 billion in inward remittance in FY 2020-21. Bangladesh never registered a remittance inflow of over $20 billion in a single year, according to Bangladesh Bank data.

According to BB data, in the first 11 months of the current financial year, expatriates have sent around $22.74billion, which was $15.18 billion in the same period of FY20.

The expatriates sent remittance of $ 2.06 billion in April, $1.910 billion in March, $1.78 billion in February, $1.96 billion in January, $2.05 billion in December, $2.8 billion in November, $ 2.1 billion in October, $2.15 billion in September, $1.96 billion in August, and $2.59 billion in July of FY21.

More than 10 million Bangladesh expatriates are working in different countries and sending hard-earned remittance to their families in the country. The contribution of remittance to the country's GDP is about 12 per cent.

The government has announced an incentive at the rate of 2.0 per cent to encourage expatriates to send their income through legal channels.

In the current fiscal, the government has allocated Tk 30.6 billion as cash incentive against remittance. In addition to this, some banks are offering a 1 per cent extra incentive against remittance.

Economist Dr Zaid Bakht said reserves are steadily rising due to a jump of remittances from expatriates and an increase in export earnings, as well as a slowdown in imports and an increase in foreign aid. Dr Zaid Bakht, also the chairman of Agrani Bank, said with the current reserves, it is possible to cover the import cost of more than 11 months at the rate of four billion dollars per month.

The inward remittance may cross $25 billion in the current fiscal year and it will be the highest remittance in a single year, he said.

The reserves have been growing steadily over the last few years. Bangladesh forex reserves stood at $10.75 billion in FY 10 and $20 billion in FY 14.

On May 2, 2021, Bangladesh forex reserve has crossed $45 billion for the first time in the country’s history. The reserve amount has been adjusted after clearing the due payment of the Asian Clearing Union (ACU).

Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka and the Maldives are currently members of ACU. The bills of all the products that Bangladesh imports from these countries have to be paid through ACU every two months.