Remittances slump by 16.24% in April despite Eid

The expatriate workers continued to remit robustly until Eid-ul-Fitr on Apr 22

After an 8.5 percent year-on-year rise in March, Bangladesh’s inward remittances dipped by 16.24 percent to $1.7 percent in April compared with the same month last year.

In March, Bangladesh’s monthly inward remittances crossed the $2 billion mark for the second time this fiscal year as the expatriates sent more money home than usual ahead of Eid-ul-Fitr.

They continued to remit robustly until the festival on Apr 22. The remittances slumped in the last week of April after the festival, according to data published by the Bangladesh Bank on Tuesday.

They sent over $2.01 billion through the legal channel last month, up from $1.56 billion in February, according to the latest data published by the Bangladesh Bank on Sunday.

The $1.56 billion remittances received in February – a nearly 4.5 percent year-on-year increase – was around 20.3 percent down from the $1.95 billion received in January.

The remittances received in April took the total in the first 10 months of the ongoing 2022-23 fiscal year to around $17.72 billion.

Bangladesh saw inward remittance slump by 15.12 percent to $21.03 billion year-on-year in 2021-22 after growing by more than 36 percent to $24.78 billion in 2020-21.

Measures taken in tandem by the central bank and the government helped remittances to grow to some extent as the inflow rose in July and August last year before starting to fall again. The remittances then turned around in November.

In recent months, the central bank further eased paperwork requirements for remittances, while the government continued cash incentives on the money sent by expatriates to encourage them to use the legal channels.

Hundi, an illegal channel of making cross-border transactions, however, continued to affect the inward remittances.

In this illegal system, expatriate Bangladeshis pay Hundi agents in foreign

currencies abroad and local agents pay the expatriates’ relatives in taka in Bangladesh.

The Bangladesh Bank bolstered its efforts to stop Hundi as the foreign currency reserves of the country kept dwindling.

The central bank also urged expatriates to send money through the banks, reminding them of legal consequences for using illegal means to conduct cross-border transactions.

The banks and foreign exchange dealers have increased the rate for dollars sent as remittances to Tk 108 as part of measures to stop Hundi.