Remittance flow shrinks further

The flow of remittance to Bangladesh shrank further in October as money transfers through informal channels such as hundi might have returned with the ease of pandemic restrictions. Expatriate Bangladeshis sent $1.65 billion in October, down 4.6 per cent from one month earlier and 21.7 per cent year-on-year, according to data from Bangladesh Bank.

Central bank officials said the recent easing of coronavirus restrictions on public movement across the globe is mainly responsible for the decline in remittance to Bangladesh.

As the peoples' movement resumed, the global hundi cartel that operates an illegal cross-boundary financial system, has become active again.

The unofficial route had faced major disruptions since the first quarter of 2020 as international travel came to a halt amid the pandemic, fuelling the growth of remittance through official channels.

Many nations, including countries where most expatriate Bangladeshis work, enforced strict restrictions on public movement to contain the spread of the virus.

Remittance, which plays a major role in strengthening the country's foreign exchange reserves, fell 20 per cent year-on-year to $7.05 billion in the first four months of the current fiscal year.

Reserves stood at $46.54 billion as of October, up 13.7 per cent from a year ago.

Bangladesh Bank officials said the reserve might decline in the coming month due to the decreasing trend of remittance against an escalation of import payments in recent months.