Most remittances came by hundi
Zarif Mahmud: On the occasion of the Eid-ul-Fitr, a large part of the remittances has come by Hundi. Relatively less has come through the banking channel. Due to high remittances in hundi, those dollars went to curb market and mostly don’t come to the country. This increased the supply of dollars in the carb market. At the same time demand and prices have increased.
Before fasting, the price of US dollar in carb market was Tk 113 to Tk 114. On Thursday it increased from Tk 116 to Tk 118. Dollars were in high demand in the carb market at the beginning of lent. At that time the price was between Tk 114 and Tk 115. In October, the price of the dollar rose to a maximum of Tk 120 in the carb market.
Banks are selling cash dollars at a maximum of Tk 110. Money exchange houses are selling at Tk 112 to Tk 113.
According to sources, this time before Eid, remittances came in two weeks from April 1 to 14, $96 million. Remittance usually increases before Eid. Only $96 million came in this increase. Remittance inflow may decrease during the rest of this month. Remittances are expected to fall below $200 million. In March, remittances came in at $102 million. The remittance average will decrease further this month.
But bankers say otherwise. According to them, too many remittances have come.
A large part of them came in the form of cash and other instruments of hundi.
According to a previous survey by the International Labor Organization (ILO), 40 percent of the total remittances in Bangladesh come through the banking channel. Of the remaining 60 percent, 30 percent in cash and the remaining 30 percent through hundi. Almost all cash remittances are transacted through hundi.
Finance Minister AHM Mustafa Kamal, citing his personal research at an event several years ago, said that 42 percent of remittances come through hundi. The remaining 58 percent comes through banks.
Recently, planning ministerAbdul Mannan also said that more remittances are coming through Hundi. Analyzing these data, an official of the central bank said that remittances usually increase during Eid. Looking at the speed and nature of remittances this year, it seems that remittances through banks have not increased. Most of the remittances came through Hundi. Because the demand for cash has increased in remittance-prone areas. These include Sylhet, Moulvibazar, Habiganj, Cox’s Bazar, Chittagong, Dhaka andManikganj.
Demand for cash has increased in these areas. The dollar was not deposited in the bank as it came to Hundi. But demand for cash has increased. In addition, several dollars have gone to the curb market. That is why the supply of dollars in the carb market has increased.
Other expatriates have sent remittances in cash especially through expatriates who have come home for Eid holidays. Instead of coming to the bank, they went to the curb market. Because dollar price in curb market is Tk 7 to Tk 8 more than bank. Cash dollars are bought at the bank between Tk 106 and Tk 107. Carb is selling between Tk 113 and Tk 115 in the market. As a result, many people are selling in the dollar curb market in the hope of extra profit.
Due to tighter supervision by the central bank, the dollar price in the curb market fell close to the bank. Now it has increased again. As the reason for this, the people concerned said that after the start of fasting, many people went to Kolkata to do the Eid market from Bangladesh. This trend was more this Eid than other times. Dollars were not received from the bank in this sector. As a result, all those dollars have gone more from the carb market. That’s why the dollar price increased in the carb market at the beginning of fasting. After Eid, a class will go on a foreign trip.
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