Remittances hit 3-month high ahead of Eid

The country's remittance inflows witnessed a rapid growth ahead of Eid-ul-Adha, reaching $1.79 billion in the first 23 days of June.

Remitters transferred $1.69 billion in May and $1.68 billion in April, according to data from the Bangladesh Bank.

Bankers expect the remittance inflows to reach $2.5 billion by the end of June.

They said expatriates usually send more remittances on the occasion of special festivals. Expatriates are currently sending an increased amount to cover family expenses during Eid, but it is expected that remittances will decrease again in the following month.

From 1 June to 23 June, the highest $291 million remittance came to the country through Islami Bank Bangladesh Limited.

State-owned Agrani Bank came in second with $115 million, while private commercial lender Premier Bank brought home the third-highest amount with $114 million.

The managing director of a state-owned bank said the country's foreign exchange reserves have depleted by about $11 billion in the last year due to an increase in import costs.

"An increase in the flow of remittances will reduce some pressure on our reserves," he added.

In the month leading up to Eid-ul-Azha last year, expatriates sent remittances totalling $1.83 billion in June. Bankers attributed the drop to the closure of banks for a few days in that month.

Ahead of the Eid festival, Bangladesh witnessed a growth in remittance inflows in June.

However, despite offering a 2.50% cash incentive, the country received $19.41 billion in the first 11 months until May of the current fiscal year, indicating only a 1.14% increase compared to the same period last year.

The current dollar rate for remittance is Tk108.50, and including the 2.5% government incentives, remitters receive Tk111.25 per dollar.

Selim RF Hussain, chairman of the Association of Bankers Bangladesh and managing director of Brac Bank, expressed scepticism about an increase in remittance inflows despite the rate hike.

He commented that the price of a dollar in the informal hundi market would rise in line with the formal market rate, suggesting that curbing the informal market is the only solution to boost remittances.