Remittances down 16.28% in April on low exchange rate
Remittances inflow to the country fell by 16.28% in April this year compared to the same period last year.
Banking sector insiders said the remittance inflow dropped as banks offered a lower exchange rate in April compared to that in March.
According to the central bank, the country received $1.68 billion in remittances in April 2023, while it received $2.01 billion in April last year.
Even in March this year, Bangladesh received over $2 billion in remittances – around $350 million more than that in April.
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Bankers said the remittances inflow to the country usually increases in the month of Eid compared to other months. Banks expected that it would be the same this year, but that did not happen. Monthly remittance inflow was high in March as over 20 banks offered up to Tk114 per dollar, but it was low in April as most banks paid $107 per dollar for remittance.
An analysis of the central bank's data shows that overall remittance has decreased but it has not decreased equally in all banks. Out of around 60 banks in April, 28 banks saw an increase in remittance income, while 22 banks witnessed a decrease compared to March. The remittance income of the remaining 10 banks remained stable.
Mostly private banks witnessed the drop in remittance. In March, private banks received $1.73 billion in remittances, which dropped to $1.38 billion in April. Private banks' remittance income fell by $348 million in one month.
On the other hand, the remittance income of the state-owned banks increased in April despite the overall decline in remittance income through legal channels as compared to March.
In March, six state-owned banks including Sonali, Agrani, and Janata banks received $235 million remittances, which rose to $245 million in April.
Senior officials of a number of banks told TBS that there will be a pressure for clearing import payments in the next couple of months. So, it is very important for the banks to get more remittances.
At the beginning of April this year, the central bank warned the managing directors of several banks against bringing in remittances at rates higher than that set by the Association of Bankers Bangladesh (ABB) and the Bangladesh Foreign Exchange Dealers Association (Bafeda). However, it did not give such a warning when banks offered rates higher than the prescribed rate in March.
ABB and Bafeda increased the dollar rate for remittance by Tk1 to Tk108 after six months on Sunday. From now on, expatriates will get Tk110.70 per dollar with an incentive of 2.5% if they send remittances to the country.
Syed Mahbubur Rahman, managing director and CEO of the Mutual Trust Bank, told TBS, "A lot of workers migrated from our country in the last few years. Accordingly, our remittance was supposed to increase. One of the reasons for the decline in remittances in April is that most banks did not pay more than the rate set by Bafeda.
"Besides, we need to reduce demand for hundi. Unless it is reduced, no matter how many initiatives are taken, remittances will not increase much. In the current context, more remittances are important for the stability of our country's economy."
