Remittance inflow has continued to drop for a six consecutive month in November, registering an 18-month low despite an upward trend in the country's trade and commerce outlook following an improved pandemic situation.
Bangladeshi expatriates remitted $1.55 billion in November, nearly 25.25% year-on-year decline. The remittance inflow was $2.07 billion in November last year.
Besides, the total remitted amount in the first five months (July-November) of the current fiscal year was $8.60 billion, which is a 21% drop year-on-year, according to the central banks data, released on Wednesday.
The country's remittance earnings reached an all-time high of $24.78 billion in the last fiscal year despite the Covid funk.
The downtrend in remittance inflow has caused an increase of price and demand of dollars in the local market. Although the central bank is selling dollars as per the demand of banks, the price of dollars is not decreasing.
According to industry insiders, since the beginning of this year, the volume of imports has increased compared to exports. In addition, the demand and price of dollars in the country's market is increasing as foreign travels for study and medical treatment have resumed.
According to the Bangladesh Bank, it sold nearly $2 billion to banks from July to November this year.
Even after that, prices of all types of foreign currencies are rising in the domestic market. On Wednesday, Bangladesh Bank's dollar rate was Tk85.80, which was Tk85.50 in October.
Speaking on the matter, Md Sirajul Islam, executive director of the central bank, said, "Remittance inflow was higher during pandemic as the expatriates sent more than usual from their savings to support their family home."
He further pointed out that many senders found their way back to informal channels like hundi as the pandemic situation improved, contributing to the dip.
He also said, "To keep the market stable, we are selling dollars based on the demands of other banks. In October, we sold $518 million and in November it was $568 million."
According to Bangladesh Bank data, the Bangladesh diaspora remitted $1.50 billion in May 2020. Although the remittance inflow went up and down during the past 18 months, in November this year, it hit the lowest.
The foreign exchange market sees mounting pressure as the trade deficit rose by three times in the July-September of the current fiscal year compared to the same period last year.
The trade deficit rose to $6.50 billion in the July-September period of the current fiscal year, from $ 2.04 billion during the same period last fiscal year.
The trade deficit increased by 58% in one month from August to September, according to the Bangladesh Bank data.