The country’s remittance earnings reached record high of $22.07 billion in the just concluded year 2021 despite a slowdown in the earnings in the second half of the year, according to Bangladesh Bank data.
The amount of remittances the country received in the previous fiscal year was $21.74 billion.
The month-wise amount of remittances was around $2 billion till June 2021, but it had slowed down gradually since then.
Restoration of connectivity and travel along with the gradual economic recovery are major reasons for the decline in the country’s remittance earnings in the second half of 2021.
Though the country’s remittance earnings reached a record high, the growth in remittance inflow dropped to 1.51 per cent in 2021. The growth rate was 18.6 per cent in 2020.
The country fetched $18.33 billion in remittances in 2019.
Asked about the growth rate decline, Bangladesh Bank executive director and spokesperson Md Serajul Islam told New Age, ‘Many expatriates had to return to the country during the Covid pandemic with their entire savings.’
Besides, the expatriates who were still abroad had supported their family members with all their earnings during the period, he said.
The introduction of 2 per cent incentive against remittance as well as channelling of all the money through the formal channel in absence of any other scope had played as catalysts behind the sharp increase in remittance inflow after the Covid outbreak, he said.
In the meantime, the number of overseas employment dropped and some of the existing overseas employees spent for employment contract renewal, Serajul said.
The restoration of foreign travel has allowed the expatriates to send gifts to their family members apart from sending cash, he said.
About the prospect in 2022, Serajul said that the enhanced cash incentive and the appreciation of the US dollar against the taka would have a positive impact on remittance inflow in the coming days.
On Saturday, the government enhanced the cash incentive on remittance to 2.5 per cent from 2 per cent.
Finance minister AHM Mustafa Kamal on the day said that the government had raised the cash incentive on remittance to 2.5 per cent from 2.0 per cent to encourage the inflow of remittance through the official channels.
The new rate came into force on Saturday.
A BB circular issued in this regard on Sunday said that the cash incentive against remittance was raised due to the importance of remittance in improving people’s living standards and to enhance foreign exchange reserve, prevention of money laundering, employment creation and for advancement of the country’s economy.
It also said that the incentive enhancement would encourage expatriates to send their hard-earned money through the legal channels.
With the inflow of high remittance against a slow import spending before the second half of 2021, the country’s foreign exchange reserve reached $48 billion in August of the year.
The reserve, however, dropped below $45 billion in November but rebounded again to $46.05 billion on December 29.
BB officials said that the figure would fell by around $1.6 billion when the payment of the Asian Clearing Corporation would be made in January.
