Migrant workers sent a record $2.1 billion home in January, marking a seven-month high, as a result of the significant number of individuals seeking employment abroad in 2023, according to the latest central bank data.
The remittances for last month saw an 8% increase compared to the same period last year, reaching $1.95 billion. This surge is anticipated to alleviate the strain on Bangladesh’s balance of payments (BoP), a critical indicator of an economy’s transactions with the rest of the world.
Inclusive of January’s influx, remittance flow recorded a 3% growth, totaling $12.89 billion during the July-January period of the fiscal year 2023-24.
Remittances play a pivotal role in bolstering Bangladesh’s foreign currency reserves, alongside export earnings.
The country’s BoP has faced challenges for over two years due to a higher outflow of funds for imports and payments compared to the inflow of foreign exchange from remittances, export earnings, foreign investments, and credit.
Despite more than 20 lakh people securing jobs abroad in the last two years, exceeding 1.3 million individuals leaving for foreign employment in 2023, the growth in remittance remains subdued. Analysts attribute this to money transfers through informal channels like hundi, offering higher exchange rates and more convenience compared to official channels.
Ali Haider Chowdhury, Secretary-General of the Bangladesh Association of International Recruiting Agencies, highlighted the need to simplify the remittance process for migrants working abroad.
He also pointed out that formal channels often require migrant workers to take leave from their employers to send money officially. In contrast, agents facilitating unofficial money transfers offer higher rates, enticing migrants to utilize informal channels.