Remittance flows from Saudi, US decreased

Staff Correspondent: In the first 9 months of the current financial year, the remittance flow to Bangladesh from the United States, which ranked first in remittances or expatriate income last fiscal year, has decreased. A decrease of about 31 percent from the country. Remittances from countries like United Arab Emirates (UAE), Singapore and United Kingdom have increased during the period under discussion. However, remittance flows from Saudi Arabia have also decreased.
Those concerned believe that the remittance flow from countries like Saudi Arabia and the United States is decreasing due to the increasing cost of living of expatriates. Expats in these countries have reduced savings from income due to rising costs. Meanwhile, the dollar price of remittance increased by Tk 3 to Tk 4 in the space of a month due to the increase in the demand of dollars for settlement of LCs and the central bank’s policy making officials advised banks to increase remittances even though they were given higher prices.
According to the data of the Central Bank, in the first 9 months of the current financial year (July-March), remittances have reached $17.07 billion. Remittances came in at $16.03 billion during the same period of the 2022-23 financial year. Of this, remittances from the United States in 9 months were only $1.94 billion. Remittances from the country were $2.80 billion during the same period last fiscal. As a result, the United States has dropped to the fourth position in the list of top remittance source countries.

Remittance inflows fell by 31 pc
On the other hand, in the first 9 months of the fiscal year, remittances from the country were $1.97 billion; It was $2.76 billion at the end of the same period last fiscal year. Remittances from the country have dropped by about 29 percent. Apart from this, remittances from Kuwait, Australia, South Korea, Qatar and Japan also decreased at a significant rate.
According to the data, more than 6.5 million people have gone to different countries of the world for employment in the three years till 2023. Out of this one-fourth or 15.67 lakh workers went to Saudi Arabia. Accordingly, remittances from Saudi Arabia are expected to increase. But remittances from Saudi Arabia have been declining for the past two years. Saudi Arabia, which was the first source of Bangladesh’s remittances, lost the top spot to the United States last year and dropped to the second position. Saudi Arabia’s position has further deteriorated in the current financial year.
Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said that the cost of living of expatriates has increased a lot in many countries. As a result, the amount of savings made from their income has decreased. There are also some countries that have imposed strict restrictions on outward remittances. These are considered to be the major reasons behind the decline in remittances.
On the other hand, due to increase in remittances from countries like United Arab Emirates (UAE), Singapore and United Kingdom, the remittance inflow during July-March 2023-24 financial year increased by about $1 billion compared to the same period of the previous financial year. According to Central Bank data, in the first nine months of the current financial year, remittances from the United Arab Emirates among the countries reached $3.27 billion. Remittances from the country were $2.20 billion during the same period last fiscal year. Accordingly, the remittance flow from the country increased by 48 percent or more than 1 billion dollars.
As a result, the United Arab Emirates has moved from the third place in the last financial year to the first place in the list of countries receiving the most remittances. Those concerned are talking about the possibility of the return of smuggled money behind the increase in remittances from the United Arab Emirates. A banker attributed the increase in remittance flows from the UAE to the return of laundered money.
According to the data of Bangladesh Bank, Bangladesh receives remittances of $250-$300 million per month from the United Arab Emirates during normal times. However, the remittances from the country started increasing from November. From December to February, remittances from the UAE averaged more than $450 million per month. According to the data, more than $350 million of remittances came from the country in March as well.
A similar trend was seen in remittance income from the UK. The country has moved up from the fourth position to the second position in the list of countries receiving the most remittances. In the first nine months of the 2023-24 financial year, remittances from the UK were $2.14 billion; That’s a 46 percent increase from $1.46 billion in the previous fiscal year.
Remittance inflows from Singapore increased by about 48 percent. Apart from this, the remittances sent by expatriates from Malaysia, Oman, Italy, Germany and Bahrain have increased significantly compared to the same period of the last financial year. Another banker said, there is no reason for the sudden increase in remittance flow from the Gulf country. Because not many new workers have gone to the country in the last few years. In the last three years, only 2.29 lakh workers went to the UAE.
The banker said that if there was an increase in remittances from the income of workers, then the highest growth should be remittances from Saudi Arabia. Because the country has about seven times more workers than the United Arab Emirates. On the contrary, remittances from Saudi Arabia are decreasing.
Meanwhile, the dollar price of remittance has increased by Tk 3 to Tk 4 within a month. It is known that banks have to spend up to Tk 116-117 to buy remittance dollars after Eid. At least 10-12 banks are collecting remittance dollars at this rate. In the second week of March, the dollar price of remittances fell from Tk 112.5 to Tk 113. However, at the end of February, banks were offering up to Tk 120-Tk 122 for remittance dollars.
Meanwhile, according to the updated information of Bangladesh Bank, in the first 19 days of the current month of April, money equal to $128 million has arrived in the country through legal channels. In local currency (Tk 110 per dollar) which amounts to more than Tk 14 thousand crore.