Remittance inflows slowly reverting to pre-pandemic levels

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Remittance inflows continued to shrivel in February with the go back to normalcy of flights, which roused the informal channels for sending cash back to action after an enforced hiatus for the travel and leisure ban for the global coronavirus pandemic.

In February, expatriate Bangladeshis delivered residential home $1.78 billion, down 9.2 percent from the prior month, according to the central bank’s latest data.

However, the inflowslast month were 22.6 percent greater than a year earlier.

The collapse of the informal channels just like the hundi system, an illicit cross-border transaction network, because of the travel ban due to the pandemic was among the known reasons for the record remittance received in 2020 despite migrants returning residence in hordes, said Zahid Hussain, a former lead economist of the World Bank’s Dhaka office.

But now, the informal channels are recovering just as the majority of the countries have withdrawn the travel and leisure ban. 

The existing trend of remittance wouldn't normally sustain beyond May as there's been no new manpower export since March last year and a good number of expatriate Bangladeshis have returned home after sacrificing their jobs, he said.

A complete of 408,408 migrant personnel returned home from 29 countries after they lost their jobs following a COVID-19 outbreak, in line with the Bureau of Manpower, Employment and Training.

Besides, some 5.5 lakh aspirants who were expected to migrate with jobs through the standard process at that time did not get the chance. 

Then another 1.5 lakh-odd workers could not go back to their workplaces after closing their vacation at home, stated migration officials and researchers.

The migrant personnel had sent additional money to their relatives amid the pandemic to cope with the unfamiliar situation, said Faruq Mainuddin Ahmed, managing director of Trust Bank.

“That’s the reason for record remittance this past year.”

But the inflows could decline in the coming days seeing that a huge number of migrant personnel have packed their bags and also have come back home once and for all, he added.

However, Zaid Bakht, research director of the Bangladesh Institute of Development Studies, includes a different view.

The inflow of remittance would maintain a typical flow in the upcoming days as the migrant personnel already are used to the legal channels and are enjoying the two 2 percent cash incentive, he said.

As coronavirus was tearing through the world in February this past year, fear gripped Bangladesh that remittance, which includes gone on to become among the lifelines of the economy, would take a massive hit.

The inflow of remittance declined from February to April when the pandemic was putting down its roots all over the world. 

But from May onwards the inflows have already been increasing as countries around the globe gradually began to ease their movement control orders to flatten the curve on coronavirus.

As per the most recent Bangladesh Bank data, the united states received $16.7 billion in remittance through the July-February amount of the fiscal year, up 33.6 % year-on-year.

With the growing inflow of remittance, the country’s forex reserve reached an archive high at $44.03 billion on February 25, 2021. 

Because of the latest development, the country’s reserve has increased by $11 billion because the outbreak of coronavirus, providing a sizable breathing place to the country.
Source: https://www.dhakatribune.com

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