Bangladeshi migrant workers sent a record amount of remittance home in January.
They sent $1.59 billion in inward remittances to Bangladesh in the first month of the year, a new monthly record. The amount is about 15 percent higher than in January 2018.
Migrant workers had sent over $9.08 billion in remittances to the country in the first seven months of the fiscal year, according to data from Bangladesh Bank. The amount over the same period in fiscal 2017-18 was $8.31 billion.
Ahsan H Mansur, executive director of the Policy Research Institute, suggested devaluing the taka’s exchange rate with the dollar further to increase the effect of remittances.
Many countries, including India, China, and Vietnam, have extensively devalued their currency against the dollar, he said, but Bangladesh has done comparatively little.
The researcher said the dollar’s exchange rate had increased 7.0 percent against the rupee in the past six months, but the value of the dollar against the taka had increased only 0.18 percent.
“We believe the exchange rate should be ‘set’ at Tk 85 to a dollar soon to increase export earnings and the value of remittance inflows.”
The inter-bank money market set the price of the dollar at Tk 83.96, but dollars were being sold as high as Tk 85, he said.
“In our opinion, the central bank should raise the inter-bank money market price for the dollar at Tk 85.”
The rise in remittances has also improved Bangladesh’s foreign reserves.
On Sunday, Bangladesh’s foreign reserves stood at $31.39 billion. The amount has not dipped below $31 billion since 2016, reports bdnews24.com.
Mansur believes the trend of strong remittance inflows will continue this year because of the hardening of the dollar against the taka and various initiatives by the government to tamp down the illegal transfer.
But he says it is unlikely that remittance flows will increase by 17 percent again. The inflows may rise by about 8.0 percent, he said.