October sees biggest remittance dip in five months

Remittance flow into the country kept falling in October for the fifth consecutive month, registering the highest $12 million dip during the period.

Remittance receipts in October dropped 21.65% year-on-year to $1.64 billion despite an upward trend in the country's trade and commerce activities with the improving pandemic situation.

The Bangladeshi diaspora had sent home $2.10 billion in October last year.

The total amount remitted by Bangladeshi expatriates in the July-October period of the current fiscal year was $7.05 billion, which is a 20% drop year-on-year, according to data released by the Bangladesh Bank on Monday.

In FY 2020-21, the July inflow of $2.6 billion was an increase of 62.5% compared to the remittance sent a year ago. The country's remittance earnings reached an all-time high of $24.78 billion in the last fiscal year despite the Covid-19 pandemic.   

Owing to the decline in remittance inflow the demand and price of dollars is increasing. Although the central bank is selling dollars considering 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 travel for study and medical treatment has resumed.

According to the Bangladesh Bank, it sold $1.68 billion to banks between July and October 19 this year.

Even then, the prices of all types of foreign currencies are rising in the domestic market. On Monday, Bangladesh Bank's selling price for dollars was Tk85.70

On 3 October, the price of dollars as per the central bank was Tk85.50 rupees. Today, On 1 November it has increased to Tk85.70 per dollar. 

In the local market, the price of dollars increased from Tk90.50 to Tk90.60 on Monday.

Speaking with workers at the capital's money exchange outlets and open market traders, it was learned that the supply of dollars is less than the demand at the moment. Those who used to save foreign currencies are now selling. Besides, only a handful of foreigners are exchanging currencies. Both types of sellers are asking for higher prices. As a result, prices have gone up.

Commenting on the matter a fellow at the Centre for Policy Dialogue said, "Last year the country was dealing with the shock of the pandemic. Expatriates, during that time, sent their savings to their families leading to an increase of remittance inflow."

He also pointed out that during the lockdown, remittance inflow came through proper banking channels while transactions through informal channels like hundi might have decreased causing the remittance flow to go up.

The trade deficit rose to $4.12 billion in the July-August period of the current fiscal year, from $697 million during the same period of last year.  According to the balance of payment data released on Monday, the trade deficit was $1.34 billion in July.