The official exchange rate of the US dollar rose by 5 per cent to Tk 110 in the just-concluded year, while the banks charged more than Tk 120 per USD during payment of import liabilities.
The banks offered prices higher than the declared rate to purchase remittance and the country witnessed a record labour migration in the year. Still, there was no remarkable growth in remittance inflow in the year.
According to Bangladesh Bank data, the wage earners' income for the year 2023 amounted to $21.9 billion, which is up by nearly 3 per cent compared to $21.3 billion received in 2022. In 2021, expatriate income stood at $22.07 billion, while it was $21.73 billion in 2020 and $18.33 billion in 2019.
It means the just-concluded year saw the second-highest expatriate income in the last five years. However, experts said the growth rate falls short of the expectation and would make it tough to maintain balance in foreign exchange transactions.
Expatriates are sending money to the country, and their families are relatively better off. But there was no surge in inward remittances in legal channels as the trend of money laundering remains unabated. The launderers are purchasing the remittances from abroad. A dollar crisis persists due to money laundering. Still, no substantial action is being taken against anyone.Ahsan H Mansur
As per the central bank data, December posted the highest expatriate income in the past six months, reaching $1.99 billion. The preceding highest expatriate income was $2.19 billion in June.
As of the end of 2023, the country received a total of $10.8 billion in remittance in the first half of the current fiscal year, which is up by 2.75 per cent compared to $10.51 billion registered in the same period of the previous fiscal year.
According to the Bureau of Manpower, Employment and Training (BMET), over 1.2 million workers went to different countries in the first 11 months of 2023, while the figure was 1.13 million in total in the preceding year. However, the rise in migrant workers did not significantly impact the expatriate income.
The amount of remittance entering Bangladesh through legal channels was likely to stand at $23 billion at the year-end. But the figure eventually stood at $21.9 billion.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said expatriates are sending money to the country, and their families are relatively better off. But there was no surge in inward remittances in legal channels as the trend of money laundering remains unabated. The launderers are purchasing the remittances from abroad. A dollar crisis persists due to money laundering. Still, no substantial action is being taken against anyone.
A recent report by the World Bank and KNOMAD said the amount of remittance entering Bangladesh through legal channels was likely to stand at $23 billion at the year-end. But the figure eventually stood at $21.9 billion.
Amid the excessive dollar crisis, the authorities undertook different measures, including experimentation in the dollar price, purchasing expatriate income at higher rates, and providing additional incentives to boost the remittance inflow.
But all these attempts failed to pull up the remittance to the expected level. The expats now receive Tk 109.5 for each dollar sent home through legal channels and the rate was at Tk 110.5 a month and a half ago. Also, there is a 2.5 per cent incentive from the government, while the banks offer a similar incentive.
The Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of Bankers, Bangladesh (ABB) now determine the dollar exchange rate in consultation with the central bank. Some banks are now purchasing remittance at up to Tk 123 per dollar.
It triggered a type of instability in the market. A number of banks are buying remittance at higher prices and selling it to the central bank. Thus, the central bank is strengthening its forex reserve base.