Remittance down in Nov to $1.93b

Monthly remittance receipts fell in November to US$1.93 billion despite higher bets, when the greenback is much needed to prop up Bangladesh's depleting foreign-exchange reserves.

Official data showed Sunday the amount received from expatriate Bangladeshis fell 2.4 percent from the October receipt of $1.98 billion. However, the figure of last month marked a little annualized growth.

The data from Bangladesh Bank also showed five months' total remittance earnings in the current fiscal year almost same as that in as many months a year before. The five-month (July-November) total of this fiscal year is US$8.8 billion

In an annualized rating the inward remittances grew by 21 percent (to US$1.93 billion) in the just-concluded month of November 2023 over the same period a year earlier.

Financial incentives alongside the depreciating mode of the taka against the US dollar helped boost the inflow in recent months, according to bankers.

"There are volatilities in the earnings in November. The first 10 days' November inflow was nearly $800 million as authorities allowed free incentives then to attract remittances, but later they withdrew it," says Dr Zahid Hussain, a former lead economist at the World Bank's Dhaka office.

During the period, authorities allowed providing incentives by banks in addition to the government-fixed 2.5-percent perk. Banks can offer up to 2.5 percent in addition to the government-fixed 2.5-percent incentive.

"To my mind, many are now not compiling the BAFEDA-fixed rate, leading to rise in the inflows," the economist notes.

Some banks are offering at least Tk 5.0 to Tk 6.0 per dollar over the permitted rate fixed by the Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of Bankers Bangladesh (ABB), in a desperate bid for netting the greenback amid the persistent dearth.

One banker says many banks have bought dollars to settle import bills and this is a reason behind the recent rise.

In the meantime, 43 privately owned commercial banks fetched $1.7 billion in November out of the $1.93 billion. Six state-owned commercial banks bagged $144 million.

Islami Bank Bangladesh is the biggest-deal private bank to attract the highest remittance into the country. It netted over $472 million or nearly 25 percent of the total monthly inflows.

Pubali Bank, another private commercial bank, attracted over $139 million in November.

Of the state-owned commercial banks, Agrani Bank booked the highest remittances amounting to over $63 million followed by Janata Bank with over $41 million.

The UAE, KSA, the UK and Oman usually are the top spots in remitting foreign exchange into Bangladesh.