Remittance rises in January, forex reserves keep falling

Bangladesh has registered an uptick in expatriate income in January, with a total remittance inflow of $2.10 billion. It is the highest monthly remittance received since June last year when the amount of inward remittance was recorded at $2.19 billion.

On the flip side, the foreign currency reserves continued to shrink amid the persistent dollar crisis. The central bank is offloading dollars from its reserves to enable the commercial banks in settling the import liabilities.

According to the weekly report of Bangladesh Bank, the foreign exchange reserves stood at $25.09 billion on 31 January, down by $140 million from the previous week. The figure drops to $19.44 billion if the reserves are calculated as per the International Monetary Fund’s (IMF) BPM6 method.

The current forex reserves fall short of the required figure as per the conditions set under an IMF loan scheme.

The country received a total of $2.10 billion in remittance in January, while the amounts of December and November were respectively $1.98 billion and $1.93 billion.

The annual remittance totaled at $21.90 billion in 2023, reflecting a modest 3 per cent rise from $21.30 billion recorded in the previous year. It is the second highest annual remittance in the last five years. The amount of expatriate income was $22.07 billion in 2021, $21.73 billion in 2020, and $18.33 billion in 2019.

Analysts said the growth in expatriate income still falls short of expectations considering the increasing manpower export.