Foreign Remittance is one of the major sources of this country’s income.But, Continuous fall of the oil price in the global market affected the remittance inflow. Sources from Bangladesh Bank stated that, remittance reception dropped by $1.3 billion in the last 11 months this year comparing to the same time frame last year.
Central Bank provided data suggests that, remittance has been on the slide every month since December last year. The remittance that came in last November was $951.37 million, which is the second lowest inflow in the last 5 years. Earlier the central bank recorded the lowest inflow of around $908 million in November 2011.
According to the sources from Bangladesh Bank, remittance reception was $13.95 billion from January to November last year. This year the remittance declined by 6.8 percent as the inflow was just $12.65 billion in the same January to November time frame. Experts of the related field sued the global oil price drop as the main reason behind the remittance slide.
The remittance inflow mainly dropped on a large scale from the oil-producing Middle East countries or namely Gulf Cooperation Council (GCC) economies. However, there are at least 1 crore Bangladeshis working abroad and contributing to the inflow. 60 percent of the expats are working in the GCC countries and 65 percent of the total remittance comes from the same Middle East region.
Oil-producing GCC countries are passing hard times, as the oil price has been consistently staying low since the last 15 or more months. Moreover, the price dropped to its historic low in this January. Falling oil prices have had a sweeping impact on the oil- producing economies of GCC, severely denting their oil revenue and spending by both governments and households.
The bonus and overtime payment has come down in those countries. Some companies have been even failing to pay the workers in due time. Besides, a recent World Bank report suggests that, the living cost has gone up in the GCC countries due to the economic depression triggered by the low oil price. As a result the income has dropped down and expats can’t save and send back much to the country resulting lower remittance inflow.
However, the devaluation of USD and other foreign currencies triggered by the economic depression also caused a drop in remittance inflow. The recent implications and strict rules to send money to country and lower USD exchange rates in the formal banking channels are also tempting expats to go for ‘hundi’ like illegal means.
Meanwhile, India, the largest remittance recipient of the world is also facing depression in its remittance inflow. Remittances to India from the GCC declined by 2.2 percent in the 12 months to March, compared with the same period a year earlier. However, World Bank’s recent report claims ”In 2016, remittance flows are expected to decline by 5 percent in India and 3.5 per cent in Bangladesh”.