Remittance sees 14pc fall in May

Remittance inflow saw a 14 percent fall in May – a month of festival this year – compared to the same month last year as many migrant workers lost their jobs to the global economic crisis caused by Covid-19. 

Bangladesh received remittance worth $1.5 billion in May this year, down from $1.74 billion in the same month of 2019, according to data released by the Bangladesh Bank on Monday.

However, remittance growth fell by 34 percent in April. Total remittance growth was 8.72 percent in the first 11 months of the current fiscal year, reaching $16.36 billion, central bank data shows. 

Foreign exchange reserve of the country stood at $33.46 billion as of Monday.

Manpower export, which had already been declining due to the global financial crisis, has been further worsened by a fall in oil prices and the Covid-19 pandemic.

In February, manpower export fell by 15.5 percent from the previous month.

The grounding of flights in March following the coronavirus outbreak caused immense sufferings for overseas workers, severely affecting remittance inflow which had already been on a downward spiral in the first three months of this year.

The Middle East accounts for more than 65 percent of the total remittance inflow to Bangladesh. Other destinations for Bangladeshi labourers, such as Italy, US and the UK, have also been severely affected by the pandemic. 

Many Bangladeshi expatriates returned from Italy as the coronavirus spread at an alarming rate in the European nation.

Negative growth of both foreign currency earning sources – remittance and export – prompted the Bangladesh Bank to seek balance of payment support from the International Monetary Fund (IMF) after more than 10 years.  

Meanwhile, the IMF has approved a disbursement of about $732 million to Bangladesh for addressing challenges posed by the Covid-19 pandemic.

The Executive Board of the IMF approved $244 million under the Rapid Credit Facility (RCF) and about $488 million under the Rapid Financing Instrument (RFI) to the country on May 29 in response to the 60th request for emergency financial assistance to help its member countries.

Current account deficit widened to $2.64 billion in the July-March period of the current fiscal year from $2.15 billion in the July-February period, central bank data shows.