Amid the many negative developments in the country's economy over the past few months including a declining remittance flow, volatility in the forex market and high inflation, to name but a few, some positive reports are also coming in. One of those is the significant increase in remittance receipt in January this year compared to its trend over previous months.
Last month, the remittance money sent by the migrant overseas workers amounted to US$1.96 billion, informed central bank sources. This marked a 16 per cent growth in remittance compared to what it was (at US$1.69 billion) in December last year. What is notable here is that this was 14.9 per cent higher than the remittance receipt recorded in January 2022 when the country received US$170 billion from migrant workers. Though this amount of rise in remittance inflow cannot be said to be extraordinary, especially when one compares it to the receipts (of remittance) in August and the preceding months last year, it is still something to rejoice over. For the last month's remittance earning was the highest in five months.
Though what lay behind this welcome turnaround is yet to become clear, it is definitely attributable to some extent to the strong measures taken by the central bank against money laundering. Also, the roles of the banks, especially the incentives they provided to the remitters did play their part. For instance, the lucrative exchange rate at Tk 107 for each remittance dollar acted as an inducement for many expatriate workers to send their money through the formal channel instead of informal ones including the illegal mode like hundi. However, it will be too early to say anything conclusive on the issue based on the remittance's performance in a single month. In that case, one would be required to watch the trend of remittance flow for some time more in the coming months. Even so, in the short run, the growth in remittance inflow is, hopefully, going to act as a morale booster for the economy. For the volatile foreign exchange market in particular, the increased inflow of remittance is expected to bring some stability. The extra remittance dollars in the country's foreign exchange reserve would also help reduce the country's current account deficit. One may note at this point that the central bank has adopted a belt-tightening policy to arrest the ever-widening current account deficit. Though it worked in some measure, it has also led to considerable reduction in the import of capital machinery and intermediate goods, which risks slowing down the nation's pace of industrial growth. Against this backdrop, if the positive trend in remittance receipts continues, it may help relax the central bank's restrictive import policy to a certain degree.
Meanwhile, other developments including the report that there has been a marked rise in the overseas employment of Bangladeshi workers in recent months are no doubt uplifting. However, it has to be ensured at the same time that this fresh crop of expatriate workers send their hard earned dollars through the formal channel rather than the informal and illegal ones. On this score, the central bank should continue its policy of giving various stimuli to the migrant workers. Simultaneously, stricter monitoring by the central bank should be in place to hold the illegal means of money transfer in check.