Bangladesh receives $1.59bn as remittance in 20 days

Expatriate Bangladeshis have sent back $1,588.78 million as remittance in the first 20 days of the ongoing month, owing mainly to Eid-ul-Fitr — the last religious festival for Muslims.

Of the total amount, $1,224.2 million was earned in just 12 days of May, according to the latest data from the Bangladesh Bank.

Furthermore, expatriates sent $684.41 million in remittance in just the first five days of May.

The remittance figure of 20 days was 84.18 million higher than the entire same month of last year.

“This is a special month for remittance earning because expatriate Bangladeshi send more money to their near and dear one for Eid expenditure,” Bangladesh Bank spokesperson and Executive Director Serajul Islam said.

The 2% cash incentive is another reason for the increasing trend of remittance earnings, he added.

From May 2 to May 20, expatriate Bangladeshis sent $399.36 million through six state-run banks; $1,154.16 million through private commercial banks; $29.45 million through two specialized banks, and $5.81 million through foreign banks, central bank data shows.

Zaid Bakht, research director of the Bangladesh Institute of Development Studies (BIDS), said that remittances would maintain a standard flow in the upcoming days as the migrant workers are already used to the legal channels and are enjoying the 2% cash incentive.

Remittance inflow increased 39% year-on-year to $20 billion in the July-April period of the current fiscal year.

Bangladesh's foreign exchange reserves also hit a record amid the Covid-19 pandemic owing to the increasing trend of remittance inflow.

Forex reserves stood at $45.10 billion on May 3, as per central bank data. With the reserve tally, it would be possible to meet import payments for more than 10 months.

The reserves have reached such comfortable levels that for the first time in its history, Bangladesh is going to do a $200 million currency swap with Sri Lanka, which is struggling to maintain a moderate foreign exchange reserve.

The Bangladesh Bank board on Sunday approved in principle a draft $200-million currency swap deal with the island country in South Asia.

As the coronavirus was tearing through the world in February last year, fear gripped Bangladesh that remittance, which has gone on to become one of the lifelines of the economy, would take a massive hit.

But remittance inflow to Bangladesh accounted for 6.6% of its GDP in 2020, making it the eighth largest remittance earner in the year, says a report by the Global Knowledge Partnership on Migration and Development (KNOMAD).

The inflow of remittance declined from February to April last year when the pandemic was putting down its roots all over the world.

Bangladesh earned $21.75 billion from expatriates last year — an increase of 18.4% from 2019 — amid the Covid-19 pandemic.