Remittance inflow hit a record $18.32 billion in the just concluded year of 2019 amid devaluation of the taka and the government move to provide incentives against remittance.
Bangladesh Bank data released on Wednesday showed that remittance inflow in 2019 grew by 17.89 per cent against $15.54 billion in 2018.
BB officials said that remittance remained the only bright spot in the country’s economy in the recent months as the other macroeconomic indicators like export, import, private sector credit growth and revenue earnings were struggling.
Rise in oil prices in the Middle East, where the majority of Bangladesh’s remittance comes from, slight devaluation of the taka against the dollar and government incentives against remittance helped boost the inflow in 2019, they said.
According to the BB data, the Bangladeshi expatriates sent $1,687 million home in December, 2019 with a staggering 40-per cent growth compared with the corresponding month in 2018.
With the December upsurge, remittance inflow soared for the fourth month in a row as the government has been giving 2-per cent incentives against remittance for the last few months.
In order to encourage the expatriates to send money through the legal channel, the finance minister announced the incentives in the national budget for the fiscal year 2019-2020.
In line with the government’s budgetary announcement, the central bank on August 6 last year issued guidelines on issuing incentives against inward remittance to encourage repatriation of earnings of the expatriates through the legal channel with effect from July 1, 2019.
Following the requests from the BB, the finance ministry on October 2, three months after the budgetary announcement, released Tk 1,530 crore for six months.
Another Tk 1,530 crore out of the government’s Tk 3,060-crore budgetary allocation for FY20 to give incentives to the beneficiaries of remittances would be released later.
The government’s move has prompted many expatriates to send money through the banking channel instead of the illegal channel known as ‘hundi’, increasing the volume significantly in the last four months, the BB officials said.
The remittance inflow also saw a rise from the beginning of 2019, in line with the uptrend in 2018, as the taka was devalued against the dollar, they said.
The value of taka against the dollar stood at 84.90 at the end of 2019, rising from 83.90 at the end of 2018, showed BB data.
The BB officials said that the banks were also giving special emphasis on bringing in the remittances to diversify their businesses