Remittance jumps yet again, grows 50% year-on-year in March

Bangladesh's remittance inflow leaped 50% in March when compared to the same period last year. The trend of high inflow started at the beginning of the current fiscal year (FY2020-21), but had gradually slowed down until the jump last month.

Bangladesh received $1.92 billion in remittance this March, central bank sources said, adding that the country received more remittance in the first nine months of the current fiscal year ($18.6 billion) than the entire inflow ($15.43 billion) of previous FY. 

Commenting on the jump in remittance inflow, Finance Minister AHM Mustafa Kamal said, "The continued trend of high remittance inflow is the result of a number of measures, such as an easier process of remitting money and the 2% incentive facility.

"People's trust in the process has returned. Remittance is now a hassle-free and harassment-free process, and the money reaches beneficiaries in time. This is why the inflow is increasing, and it will continue to do so in the future."

Meanwhile, Centre for Policy Dialogue's (CPD) Distinguished Fellow Dr Mustafizur Rahman said, "In March last year, the remittance inflow dropped by 12% compared to March 2019. The jump may seem like a big one when compared to March 2020, but it is not much compared to March 2019."

Bangladesh received $1.46 billion in remittance in March 2019, and $1.27 billion in March 2020. 

Besides, in the July-March period of current fiscal year, the country received $18.6 billion in remittance, which is 35% higher than the same period in previous FY – standing at $13.77 billion. 

When asked about how Bangladesh managed such a leap in remittance amid the Covid-19 crisis, Mustafizur Rahman said, "The pandemic has crippled many rackets involved with hundi [illegal channels]. So, more remittance is coming in through the legal channel.

"Besides, initiatives such as the 2% incentive on remittance (some banks are giving 3%), opportunity to remit up to $5,000 with any documents and the urge among expats to take better care of their families amid the second wave are also boosting remittance."

Adding that the expatriates have already remitted what savings they had with them, Mustafizur said, "The number of new workers going abroad is very low and the second wave is starting to hit all across the globe.

"These factors are making it difficult to predict whether the inflow of remittance will keep growing in the coming days."

The central bank's quarterly report on remittance shows 36,176 Bangladeshis went abroad in the October-December period in the current fiscal year, and more than 3,000 of them were women. 

However, around two lakh workers went abroad during the same period previous year, and more than 26,000 among them were women. 

CPD – in a recent study led by Dr Mustafizur Rahman – recommended continuing the 2% incentive facility and further popularising the legal remittance channel to maintain this growth.

The think tank also suggested that Bangladesh's embassies be directed to support workers that lost their jobs due to the pandemic and manpower be exported through government initiative. 

CDP added that the authorities should check whether money is being smuggled out of Bangladesh only to be sent back home through the legal remittance channel.

A high inflow of remittance helps a country maintain its macroeconomic stability and boosts its foreign currency reserve. 

On this matter, Mustafizur Rahman said, "The government has created an infrastructure development fund with money from the reserve. Utilising this fund will be easier if the high inflow of remittance continues."