Bangladesh's foreign exchange reserves have crossed the $37-billion mark for the first time.
"Though foreign trade slowed, foreign exchange reserves piled up because of a satisfactory remittance flow amid the coronavirus pandemic. Aid from developing partners has also started to arrive," a senior official of the Bangladesh Bank told The Business Standard on Tuesday.
According to the central bank, the country's foreign exchange reserves rose to $37 billion on July 27. Earlier on July 2, the reserves had crossed the $36 billion mark for the first time.
"Remittance is the key driver behind the rise of reserves to this highest point," notes a press release issued by the finance ministry on Tuesday.
According to central bank data, the country received $2.24 billion as remittance from expatriates between July 1 and July 27. Before this, the country had never received such a large amount of remittance in a single month.
The single-month highest remittance was previously recorded at $1.83 billion in June this year.
In the 2019-20 fiscal year, $18.20 billion came into the country as remittance, which was 10.87 percent higher than inward remittance in FY2018-19.
Bangladesh received $16.49 billion in remittances from migrant workers in the 2018-19 fiscal year.
Moreover, the country recently received mission funds and some project loans from the World Bank, the Asian Development Bank, Japan International Cooperation Agency (JICA) and others. Funds from the IMF were received just two weeks ago.
The Bangladesh Bank official said, "Every year, remittance flow increases on the occasion of Eid, and Eid-ul-Adha is around the corner and so migrant workers are sending more money to their families back home."
Another reason behind the increase in remittance is the government's decision to provide 2 percent incentive on inward remittance from the current fiscal year to discourage migrant workers from sending money through Hundi (illegal channels), said the official.
Currently, there are over 10.2 million Bangladeshis working in 174 countries across the world.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said he did not see any hope in the trend of forex reserves being boosted by remittances.
"Remittances are not a recent income of our migrant workers; these are their savings. Now they have started to send the savings back home because they may have to return to the country shortly," he said, adding that in the Middle East, where oil prices have fallen, migrant workers will lose jobs.
In the near future, a significant number of migrant workers will lose their jobs and return to the country because of the impact of Covid-19, he added.