Even Eid-ul-Fitr, typically a boon for remittance inflows, failed to buck the trend of sliding receipts this year.
In April, expatriate Bangladeshis sent home about $2 billion, down about 2.9 percent year-on-year, according to data from the Bangladesh Bank.
The amount though is the highest since May last year, when about $2.17 billion was received. Eid-ul-Fitr, the biggest festival in Bangladesh, was celebrated in the middle of May last year.
After a spike in inflows for the global coronavirus pandemic, which broke down the informal channels of cross-border money transfer, remittance receipts began contracting in July last year and have been registering negative growth since.
To stem the trend, the government in January increased the cash incentive on remittances sent through the proper channels to 2.5 percent from 2 percent.
But that appears to be failing to work its magic thanks to the higher kerb market rate than the official exchange rate for the dollar.
Each dollar is selling for about Tk 92 in the kerb market. The official exchange rate for the dollar is Tk 86.45.
April’s inflows take the remittance received so far this fiscal year to $17.3 billion, down 16.3 percent year-on-year.
When announcing the increased cash incentive on remittance, Finance Minister AHM Mustafa Kamal said the move would boost receipts to $26 billion this fiscal year, up from $24.7 billion received in fiscal 2020-21.
Let alone hitting that number, it is unlikely that last fiscal year’s receipts would be bested.
The sliding remittance inflows coupled with the surge in imports have put pressure on the balance of payment and the country’s foreign exchange reserves.
The foreign currency reserves are hovering around the $44 billion-mark, down from about $46 billion in the earlier part of the fiscal year.
Between July last year and March this year, about 7 lakh Bangladeshis left for jobs abroad, according to data from the Bureau of Manpower, Employment and Training.
