Remittance hits record high in July

The monthly inflow of remittance hit an all-time high in July ahead of Eid-ul-Adha, with the figure reaching almost $2 billion in the first three weeks.

According to data from the Bangladesh Bank, the country received $1.96 billion in remittance from expatriates from July 1 to 23.

In June, the last month of fiscal year 2019-20, $1.83 billion came in.

Officials of the central bank said the inflow of remittance in July would reach around $2.5 billion if the trend continues in the last week.

They said the inflow of remittance usually increases ahead of Eid-ul-Fitr and Eid-ul-Adha, two major religious festivals of the Muslims.

Besides, joblessness and drop in income of the migrants’ near and dear ones in Bangladesh due to the coronavirus-induced economic shock prompted many to remit higher amounts in the past few months as a form of support, officials said.

The record remittance figure in July came as a continuation of that in the immediate past fiscal year 2019-20 when the country received $18.20 billion amid the coronavirus pandemic. It was a record until then as the country had never received this much in a fiscal year before.

Even though the inflow of remittance spiked since May this year, migration from the country since the outbreak of coronavirus in January has been witnessing a significant fall as many countries have still kept their borders closed for foreign nationals.

Asked why the inflow of remittance increased despite the pandemic, Policy Research Institute Executive Director Ahsan H Mansur told The Business Standard many Bangladeshi expatriates are sending money as part of their preparation to return home due to joblessness abroad.

Economies of almost all countries, including the destinations of Bangladeshi migrants, have been facing stagnations, resulting in job cuts, he said.

“This is a major reason behind the increased inflow of remittance even though migration from Bangladesh remained almost halted in the last several months due to coronavirus,” explained Mansur, also the chairman of Brac Bank.

Besides, the inflow of remittance usually increases before Eid, he said.

Apart from these, fall in income and joblessness of family members and relatives in Bangladesh could be behind the surge in remittance inflow, he added.

Shameem Ahmed Chowdhury Noman, secretary general of Bangladesh Association of International Recruiting Agencies, said many expatriates had become jobless and did not get paid in the last few months, but now the situation is getting normal.

“So, it may have happened that thousands of workers got their salaries and sent the money this month. This is how remittance hit a record high.”

He said remittance inflow increases before Eid-ul-Adha as many send money home for Qurbani.

“If we can analyse country-wise remittance data, we will be able to say for sure whether the record high remittance was from migrant workers or diasporas.”

Noman said most of the Bangladeshi migrants have not yet been affected by Covid-19.

“We have to wait to see the upcoming trends of remittance before making a final comment.”

Dr Syeda Rozana Rashid, migration expert and professor of international relations at the University of Dhaka, said, “It is not the fact that the current flow of returnees has impacted the inflow of remittance. There are more than one crore migrants while only several lakh have returned.”

“The record remittance in July reflects how migrants sent money during the crisis. As the Covid-19 situation is improving gradually, workers are going back to work and are sending money ahead of Eid.

“Besides, many workers fear that they have to return in the coming days because of layoffs and joblessness. This is why they are sending all their savings or money they got from other sources,” she added.

According to Brac Migration Programme, around 2.5 lakh migrants have returned from different countries amid the pandemic.

As a result of remittance inflow and slowdown in imports, the country’s foreign exchange reserve increased to $34 billion in June, reaching $36 billion on July 2.

With the record inflow of remittance in July, the foreign exchange reserve was reaching close to $37 billion now.

On the eve of Eid-ul-Fitr in May last year, the inflow of remittance was a record $1.75 billion.

In FY20, the government introduced a 2 percent cash incentive for remittance in order to encourage expats to send money through legal channels.