Remittance continues ascending regardless of COVID-19 pandemic headwinds
Migrant laborers who work abroad have once again beaten estimates, sending home 36% higher remittance in August, in a break for their families as well as the feeble economy during the COVID-19 pandemic.
A month ago, they remitted $1.96 billion against $1.44 billion in the same month a year back, Bangladesh Bank information appeared.
This was the second consecutive month in the current financial year that they sent a higher amount of remittance. The inflow of remittance grew 50% year-on-year to $4.56 billion in the July-August period.
This was the third month straight that remittance inflows have been ascending despite falling employment abroad and the arrival of migrant workers from their host nations, which are likewise battling notwithstanding the epidemic.
Around 181,000 migrant laborers secured positions abroad from January to May. Conversely, at least 78,043 Bangladeshi laborers got back from 26 nations since April because of the emergency, as indicated by statistics published by the expatriate welfare ministry a month ago.
Bankers credited the government’s 2% money incentive on the remittance sent through the formal channels as one of the fundamental purposes for the ongoing surge.
“We had forecast that remittance inflow would increase because of the incentive,” said Abu Reza Md Yeahia, deputy managing director of Islami Bank Bangladesh Ltd, the top remittance-getting bank.
Plus, the extension of operator banking in rural zones has urged migrant laborers to send cash through the proper channel as the recipients get the funds rapidly, he said.
Yeahia additionally discovered repeated floods behind the spiral in inflows. There was a limitation on sending cash over a specific amount in the Middle East, especially in Saudi Arabia. That limitation has been relaxed, he said.
Gulf nations, which incorporate Saudi Arabia, the UAE, and Kuwait, are home to 75% of about 1.3 crore Bangladeshis living abroad for jobs.
Remittance hit a record-breaking high of $18.2 billion in the economic year 2019-20, up 10.87% year-on-year.
The developing inflows of remittance helped the nation’s foreign exchange reserve and it came amid gloomy forecasts by the World Bank and the Asian Development Bank.
The ADB said Bangladesh would be among the five most exceedingly terrible developing Asian economies regarding remittance inflows. In the worst-case scenario, Bangladesh’s remittance will decay by 27.8% from its 2018 level.
In 2018, Bangladesh got $15.5 billion in remittance.
In April, the World Bank forecast that remittance flow to Bangladesh may plunge by as much as 22% this year as a result of the continuous COVID-19 pandemic.
The rising flow of remittance took the nation’s foreign currency reserves to an unsurpassed high of $38.48 billion on August 26, BB information appeared.
Transfers from migrant laborers have logically become a mainstay of strength for the Bangladesh economy.
Around 590,000 migrant workers left Bangladesh on an average every year from 2007 to 2017 and 8% of the families have at least one international migrant. Remittances represent 60% of income in households with international migrants.
41% of households with at least one family member engaged as a migrant worker would be in poverty without remittance, said Stefano Paternostro, practice supervisor for social security and jobs for South Asia at the WB last September.