Bangladesh sees $2.3bn in inward remittances in 26 days of June

Remittances have surged again, bolstering Bangladesh’s foreign currency reserves

Remittances rose again in June as incoming deposits from expatriate workers strengthened once again. In the first 26 days of June – the last month of the recently concluded 2023-24 fiscal year – a total of $2.3 billion in remittances came in through banking channels.

In the first 21 days of June, Bangladesh had collected $1.94 billion in reserves, according to a report by Bangladesh Bank.

After that, more remittances were added, said Mezbaul Haque, spokesman and executive director of the central bank.

Last year, Bangladesh had received $2.19 billion in inward remittances throughout all of June. This means the remittances collected in the first 26 days of this June is already higher year-on-year.

The central bank will announce the total remittance data for the month on Jul 2 as the banks are closed for a ‘bank holiday’ on Jul 1.

Remittances crossed $2 billion in a month in January after a long slump. That month, expatriates and their beneficiaries deposited $2.11 billion in Bangladesh.

As remittances regained momentum, their growth remained above 10 percent in the first 11 months of the previous fiscal year. The remittance growth rate had been 2.75 percent the year before.

Generally, expatriates send more money home around Ramadan, Eid, and the Bengali New Year. Last month, expatriates sent more money home due to Eid al-Azha.

Central bank officials believe that the increase in the price of the dollar against the taka has also played a part in increasing the inflow of remittances.

The flow remained quite steady until the third week of June. Since then, an average of $80 million has come in to Bangladesh every day. As a result, a Bangladesh Bank official believes the remittance total for June may even pass $2.5 billion.

In May, remittances through the banking channel reached $2.25 billion with a growth rate of 33.23 percent. It was the highest level of remittances in a single month over the past three years. The record was in July 2020, when remittances reached $2.59 billion dollars through the banking channel.

According to the central bank data, the average daily remittance in June was $88.4 million, up from $72.7 million in May.

In the first 11 months of the fiscal year, total remittance inflow to Bangladesh reached $21.37 billion, a $1.96 billion or 10.10 percent rise from the previous fiscal year. In the first 11 months of fiscal year 2022-23, remittances came in at $19.41 billion.

The jump in remittances is bolstering Bangladesh's foreign exchange reserves. On Jun 26, Bangladesh also added loans from Korea, the International Monetary Fund, and several other organisations.

By the end of Jun 27, Bangladesh's gross reserves stood at $27.15 billion.

According to the IMF approved BPM6 system, the reserves stand at $22 billion, said Bangladesh Bank spokesman Mezbaul.

This means the difference in reserves between the gross count and the BPM6 method remains about $5.15 billion.

On Jun 26, the country’s forex reserves stood at $24.62 billion in gross terms and $19.47 billion under the BPM6, the central bank said.

Bangladesh Bank does not disclose the net amount of its reserves. It only lets various organisations, including the IMF, know the figure.