The country received $800 million in remittance in the first two weeks of the current month in contrast to $871 million over the same period a year before
Remittance inflow – which usually sees a jump before any festival – saw negative growth during Ramadan as a large number of migrant workers lost their jobs under the impact of the Covid-19 outbreak.
In the first 14 days of May, remittance growth fell by 8.15 percent year-on-year as expatriates sent less money home even before Eid, according to Bangladesh Bank data released on Sunday.
The country received $800 million in remittance in the first two weeks of the current month in contrast to $871 million over the same period a year before.
The fall in remittance has already put pressure on the country’s foreign exchange reserves.
The foreign exchange reserves stood at $32.84 billion as of 17 May which was above $33 billion in the first week of this month.
Although reserves have been declining, its position still looks strong with a capacity to cover imports of around seven months.
Despite a strong position of reserves, the government has sought a loan from the IMF (International Monetary Fund) to support the balance of payment.
Due to strong reserves, Bangladesh had not sought a balance of payment support from the IMF after 2008.
However, in the wake of the coronavirus outbreak, the government has sought a loan worth half of the country quota from the IMF.
The Bangladesh Bank, in its assessment report presented to the IMF, has projected that the country’s reserves will come down to $29 billion by the end of this fiscal year, which is still considered relatively strong as it will cover the imports of 5.3 months when three months’ coverage is standard.
Bangladesh can get around $1 billion in loans from the IMF, according to country quota.
Bangladesh’s remittance inflows will likely see further erosion as around 20 lakh Bangladeshi migrants face possible deportation after the Covid-19 pandemic. Most of them would return from Middle Eastern countries.
Experts have estimated this number considering different factors in the sector. The government is concerned about the issue and trying to project the potential number of migrants who may face deportation.
Additionally, the government is negotiating with host countries and using different measures of diplomatic activities to stop the deportation process.
At present, Bangladesh is under pressure to bring back its undocumented expatriate citizens.
Sources said around two lakh undocumented migrants may return home in the next few months from different countries.
Experts say from among the 1 crore Bangladeshis in the global job market, 20 lakh may return home from many countries due to job cuts and economic recessions in the host countries in the post-novel coronavirus slump.
Furthermore, if the pandemic situation does not abate by September this year, Bangladesh will fail to send at least 4.5 lakh workers to the global job market.
In the meantime, More than 6,66,000 expat workers returned to Bangladesh between January and mid-March.