Remittance inflow increases 15% in January
The year-on-year growth in remittance inflow stood at 4.3% for the first seven months of FY23 as the country received $12.45 billion in remittance during the period
Remittance inflow increased by 15.24% to $1.96 billion in January compared to that of December last year, according to the latest data from the Bangladesh Bank.
With the latest addition, the year-on-year growth in receiving remittances stood at 4.3% for the first seven months, July to January, of the ongoing fiscal year (FY23) as the country received $12.45 billion in total during the period. Last year, it was $11.94 billion.
In July and August, remittance inflow was $2 billion on average. It, however, fell to $1.5 billion in the next three months after the central bank authorised the Association of Bankers, Bangladesh and the Bangladesh Foreign Exchange Dealers' Association to set dollar prices for export-import of the private sector, and remittance earnings.
In December, the inflow increased to $1.7 billion.
Talking to The Business Standard, bankers said the rise in remittance came as they bought remittance dollars at higher rates than the fixed one amid the greenback crisis. If the dollar rates are left to the market, the influx of remittance will increase further.
"The remittance sector has now come to a comfortable position, I think. However, it will take time to increase the flow substantially," Association of Bankers Bangladesh Chairman and Brac Bank Managing Director and CEO Selim RF Hussain said.
"Stability has been brought to the sector over the last five to six months. Many argue why we do not increase the dollar rate at a time but we believe that leaving dollar rates to the market in developing countries like Bangladesh should be in phases," he told The Business Standard.
Currently, the prescribed rate is Tk107 for collecting remittance dollars. The rate for export proceedings increased to Tk104 and that for import payment to Tk105 per dollar yesterday.
"The central bank governor recently asked us not to buy remittance dollars at higher rates than the prescribed one as the higher rates might increase some $200 million in remittance inflow but it might lead to an increase in inflation," said a treasury head of a bank, wishing to remain unnamed.
Following the direction, the Association of Bankers, Bangladesh and the Bangladesh Foreign Exchange Dealers' Association also warned banks not to buy remittance dollars at higher rates.
Earlier in the joint meeting of the Association of Bankers, Bangladesh and the Bangladesh Foreign Exchange Dealers' Association on 18 January, a number of managing directors of banks complained that a number of banks were collecting remittances at rates higher than the prescribed rate.