Migrant workers sent home $21.61 billion in FY23

Migrant workers sent $21.61 billion to Bangladesh in the just-concluded fiscal year as remittance rebounded on the back of higher flow on the occasion of Eid-ul-Azha and a record outflow of labourers, official figures showed yesterday.

They remitted about $2.2 billion in June, lifting the overall inflow for the entire 2022-23, according to the Bangladesh Bank.

This is the highest single-month high since July 2021 when $2.6 billion entered the country.

June's takings were up nearly 20 per cent compared to the same month of 2022 whereas last fiscal year's total earnings beat the central bank's forecast by a small margin.

The central bank had projected a 2 per cent year-on-year growth in FY23 but it stood at 2.75 per cent finally. Some $21.03 billion was remitted in FY22.

Remittance flow usually goes up ahead of major occasions such as Eid-ul-Fitr and Eid-ul-Azha as remitters send a higher amount to help their families celebrate the festivals. Eid-ul-Azha was celebrated on Thursday.

The latest increase in remittance comes as more than 10.74 lakh migrant workers left Bangladesh for jobs abroad in the last fiscal year, the highest in a single year. In 2021-22, some 9.07 lakh workers went abroad.

But the funds transferred by the labourers have not surged proportionately since remitters preferred the hundi cartel, an illegal cross-border financial transaction system, owing to the better rate of the US dollar offered by the unofficial channel.

About half of all remittances entered the country through unofficial platforms even before the coronavirus pandemic.

A wide gap in formal and informal exchange rates has been one of the factors behind the sharp fall in the foreign exchange reserves in Bangladesh as it shifts remittances from official channels to unofficial routes and impedes repatriation of export proceeds, said the World Bank in April.

In order to encourage the use of formal channels, the government provides a 2.5 per cent incentive and has introduced remitter-friendly processes.

But Selim Raihan, executive director of the South Asian Network on Economic Modeling, thinks if the exchange rate is left to the market, the incentive will not be required.

Currently, there are different exchange rates of the US dollar for exporters, importers, and remitters.

At present, more than 1.49 crore Bangladeshi migrants are working in 176 countries.

Remittance flow would grow by 10 per cent to $23.6 billion in the current fiscal year, according to the forecast of the BB.