The flow of remittance to Bangladesh fell sharply in November as the country’s expatriates continue to prefer informal channels for sending their money.
Expatriate Bangladeshis sent $1.55 billion in November, down 5.48 per cent from a month earlier and 25 per cent year-on-year, according to data from Bangladesh Bank.
This was the lowest remittance earnings since June 2020, when the amount was $1.83 billion.
Since then, the monthly inflow ranged between $1.83 billion and $1.64 billion until October this year.
As restrictions on public movement have been removed, the global hundi cartel which operates an illegal cross-boundary financial system has become active again.
The unofficial route had faced major disruptions in the first quarter of 2020 as international travels came to a halt due to the advent of Covid-19, fuelling the use of banks and other official channels to send remittance, a Bangladesh Bank official said.
However, the hundi cartel may face another roadblock as some countries recently reintroduced restrictions on public movement in order to clamp down on the latest coronavirus variant.
Many nations, including countries where most expatriate Bangladeshis work, had earlier enforced strict restrictions on public movement to contain the infection rate.
Remittance, which plays a major role in strengthening the country’s foreign exchange reserves, fell 21 per cent year-on-year to $8.6 billion in the first five months of the current fiscal year.
Reserves surpassed $48 billion in August but it has since maintained a downward trend.
The reserves stood at $44.94 billion in November 24, up 9 per cent from a year ago.
Syed MahbuburRahman, managing director of Mutual Trust Bank, said the increase in inward remittance last year, when the pandemic was at its peak, was unusual.
Remittance soared 36 per cent year-on-year in fiscal 2020-21, its sharpest increase in 30 years. Expatriates sent home $24.8 billion that year compared to $18.2 billion in 2019-20.
Many Bangladeshi migrant workers lost their jobs amid the economic slowdown, which had a negative effect on remittance.
“The ongoing declining trend in the flow of remittance is expected though given the lower trend of manpower exports compared to pre-pandemic levels,” Rahman said.
Between January and September this year, some 3.8 lakh people went abroad for work.
The figure was about 2.2 lakh last year and seven lakh in 2019, according to data from the Bureau of Manpower, Employment and Training.
Another managing director of a bank, on condition of anonymity, said the hundi cartel was now offering Tk 3 to Tk 4 more than the rates offered by banks to the beneficiaries of remitters.
This has encouraged remitters to send their money through the informal channel, he said, adding that the central bank should consider depreciating the local currency against the US dollar to some extent in order to weaken the hundi cartel.
The inter-bank exchange rate of the taka stood at Tk 85.8 per US dollar in contrast to Tk 84.8 a year ago.
AbulKashemMdShirin, managing director of Dutch-Bangla Bank, said that people had recently started to travel abroad, helping the informal channel to settle transactions smoothly.
Manpower exports should be geared up to strengthen the inflow as well, he added.
