Experts highlight that remittances from expatriates could be crucial in alleviating Bangladesh’s dollar crisis. While remittance flows through legal channels are increasing, not all overseas income is coming through banks.
Expatriates currently receive 121 Taka per dollar via banks, slightly less than the 122 Taka in the open market. Due to central bank regulations, illegal Hundi operations have been weakened, pushing more expatriates to use formal banking channels.
If Hundi operations are entirely curbed, the annual remittance inflow could double from $25 billion to $50 billion. However, 10 major challenges, such as exchange rate gaps, high fees, and insufficient banking facilities abroad, still hinder full compliance with legal channels.
Economists are urging the government to take stricter measures, enhance efforts to bring expatriate earnings through official channels, and seek international assistance if necessary. Cracking down on money laundering, particularly in destinations like Dubai and Portugal, is also essential.
Bangladesh Bank recently uncovered significant money laundering networks abroad, including 13,000 businesses in Dubai linked to $6.5 billion in illegal transfers. Economists believe tackling these issues could stabilize the exchange rate and bolster reserves.
Remittance Growth Steady
Bangladesh saw a steady flow of remittances in 2023, with $2.11 billion in January and $2.22 billion in August. Total remittances for the 2023-24 fiscal year reached $23.92 billion, compared to $21.61 billion in the previous year.
If more remittances are routed through legal channels, the foreign currency market and reserves could see significant improvement.
