Inward remittance in Bangladesh plummeted to six-month low with $1.59 billion received in August, dropping 21.47 percent year-on-year.

Marker insiders suggested an apparent rise in illegal hundi business which affected the legal channels negatively. 

The remittance in August was also 19 percent down from the previous month, which totalled $1.97 billion.

Banking sector insiders said the higher dollar price in the kerb market compared to that in the formal banking channel has actually given rise to the remittance sending through such informal means.

Bangladesh received lower remittance of $1.56 billion in February this year. The receipt was the lowest in the last four years, central bank data showed.

The remittance inflow fell at a time when Bangladesh is in crying need of dollars to overcome the acute dollar crisis that has caused a free fall in taka’s value and a spike in inflation.

Exports and remittance are its economic mainstay and are the main source of forex earning.

Earlier on 31 August, the Association of Bankers, Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers Association (BAFEDA) increased the remittance dollar price by Tk 0.50 to Tk109.50.

In addition, the government announced a 2.5 percent cash incentive on the exchange rate of remittance.

Monthly remittance receipts crossed $2 billion with $2.19 billion inflow in June this year and $2.09 billion inflow in July last year mainly because of what bankers attributed to higher receipt during Eid-ul-Adha.