Bangladesh’s inward remittances rise to $2.2bn in June, highest in three years

The country posts a 19.5 percent year-on-year growth in remittances in June

Inward remittances sent by Bangladeshis abroad in June have increased by 19.5 percent year-on-year to around $2.2 billion, most in about three years.

The latest figure took remittances received by the country in the 2022-23 financial year to $21.61 billion with an annual growth of 2.75 percent, Bangladesh Bank data showed on Sunday.

The country’s inward remittances increase abruptly during the Muslim festivals of Eid during which expatriates try to send more money to their families. The country celebrated Eid-ul-Azha on Jun 29, which is believed to be a factor behind the rise in remittances.

But this was not the case during Eid-ul-Fitr in April, when 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 in the last fiscal year. 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.

Bangladesh saw inward remittances 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.