Remittance, the only thing keeping the foreign exchange market propped up amid falling export earnings, tumbled by 11.77 percent year-on-year in March as the coronavirus hit the global labour market.
Bangladesh received remittance worth $1.28 billion last month, compared to $1.45 billion in March last year, according to central bank data.
Manpower export, which had already been declining due to the global financial crisis, has been further worsened by a fall in oil prices and the Covid-19 outbreak.
In February, manpower export fell by 15.50 percent compared to the previous month.
The grounding of flights in March following the coronavirus outbreak caused immense sufferings for overseas workers, severely affecting remittance inflow which had already been on a downward spiral in the first two months of this year.
Biman, which carries 40 percent of total passengers to Middle Eastern countries on employment visas, suspended all flights to the destination.
Other airlines operating in the Gulf region – a hub for Bangladeshi migrant workers – also suspended flights from the second week of March due to travel restrictions. As a result, many expatriate workers could not join their work.
The Middle East accounts for more than 65 percent of total remittance inflow to Bangladesh.
Manpower recruiting agencies are also worried about their business as only a few countries are allowing Bangladeshis to enter.
"Some 130 workers are scheduled to go to Kuwait through my recruiting agency within the next one month," said Kamal Sikder, managing partner of SB International.
"Their jobs became uncertain after Kuwait imposed a ban."
Around 1,000 workers who came to Bangladesh on vacation are waiting to return to Kuwait, Kamal added.
Moreover, the gulf economy has also suffered a rapid decline with the drastic fall in oil prices amid the pandemic hurting the incomes of labourers working there and posing a severe risk on remittance inflows in the upcoming days.
Moreover, the drastic fall in oil prices amid the pandemic has also worsened the gulf economy, hurting the incomes of labourers living there and posing a severe risk on remittance inflows in the upcoming days.
Global oil prices collapsed to a nearly 17-year low, around $20 a barrel, owing to worldwide flight suspensions and the pandemic.
Other destinations for Bangladeshi labourers, such as Italy, US and the UK, have also been severely affected by the pandemic. Many Bangladeshi expatriates returned from Italy as the coronavirus spread at an alarming rate in the European nation.
Remittance inflow kept its strong growth since the government announced 2 percent cash subsidy in the budget for the current fiscal year, allocating Tk3,060 crore to meet the expenses of this incentive.
Among all economic indicators, only remittance remained strong for several months, giving the Bangladesh Bank breathing room in managing the current account balance.
The country's current account deficit declined by 61.37 percent in the first seven months of this fiscal year due to a fall in imports and increase in inward remittance.
From July to January of this fiscal year, the current account deficit stood at $1.51 billion, down from $4.04 billion in the same period a year ago.
The total receipt in the first nine months of the 2019-20 fiscal year stood at $13.78 billion, 16 percent higher from the same period last fiscal year.
Banks have already begun feeling the pinch of falling remittance as the foreign currency holding of banks declined in recent days, said Syed Mahbubur Rahman, managing director of Mutual Trust Bank.
He said the falling trend of remittance is likely to continue amid this uncertainty brought on by the pandemic. The fall in foreign exchange inflows will add liquidity pressure on the banks, he added.
The foreign exchange reserve already shows lower, reaching $32.56 billion on March 24 from $32.98 billion in February, according to central bank data.