Remittances slipped back into negative growth in fiscal year 2021-22 for the first time in the last six fiscal years as many remitters opted for the informal channels to send their money.
The inflow stood at $21.03 billion in FY22, a decrease of 15 per cent year-on-year, according to data from Bangladesh Bank.
But the positive part is that last fiscal year’s inflow was higher than that of FY20 when the pandemic was largely absent. Migrant workers had remitted $18.2 billion during the period.
Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue, said remittances inflow in the just concluded fiscal year should be considered positive.
“We should not compare the last year’s inflow with that of the year before given the emergence of the pandemic,” he said.
Expatriate Bangladeshis sent a record $24.77 billion in FY21 when the hundi system, an illegal cross-boundary financial system to launder money, remained inoperative due to the pandemic.
The majority of countries in the globe had imposed lockdowns during the period to contain the pandemic, which forced the hundi cartel to stop their businesses for the time being.
But the hundi system came into operations in a full-fledged manner since the first half of last fiscal year, putting an adverse impact on remittances.
Rahman said remittances might regain its tempo this fiscal year as manpower export has increased to a large extent in recent months.
Some 8.77 lakh people went abroad for work in the first 11 months of FY22 in contrast to 2.31 lakh in the entire FY21.
He said remitters were now receiving around Tk 96 against each dollar based on the calculations of the existing exchange rate of the taka against the US dollar and a 2.5 per cent incentive on the amount sent as remittance.
The exchange rate of the taka stood at Tk 93.45 yesterday in contrast to Tk 84.80 a year ago.
Rahman said the kerb market, an open market where common people sold and bought foreign currencies, now offered Tk 98 per dollar, meaning there was an exchange rate gap of Tk 2 between formal and informal markets.
Such gaps discourage remitters from sending their hard-earned money through the banking system, he said.
Md Arfan Ali, managing director of Bank Asia, said remittances would increase in the days to come because of the surge in manpower export.
Banks will get a respite from the ongoing foreign exchange pressure if the ongoing trend of manpower export continues, he said.
Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said it would take one or two months more to comment to this end.
“We have to monitor the trend of remittances and the ongoing foreign exchange rates, whether the inflow gains stability soon,” he said.