Remittance inflow increased slightly in the first half (July-December) of the current financial year 2022-2023 compared with that in the same period of FY 2021-22 amid various initiatives taken by the government and the Bangladesh Bank.

The inflow increased to $10.5 billion in July-December compared with that of $10.23 billion in the same period in the past year, according to the Bangladesh Bank data released on Sunday.

In December 2022, the remittance inflow increased to $169.9 billion from $163.06 billion in the same month in the previous year.

The country’s private commercial banks saw a rise in remittance collection as 41 private commercial banks received $1,407.62 million in December while they received $1,289 million in November.

Although the remittance inflow rose slightly in July-December, businesses are failing to settle letter of credit payments due to a shortage of the greenback on the financial market, bankers said.

The country’s trade deficit widened by $773 million to $9.58 billion in the July-October period of the current financial year 2022-23 compared with that of $9.16 billion in the same period in the past financial year.

The country has been suffering from energy, gas and power crisis in recent months as it is struggling to make import payments in dollars due to depleting reserves.

The foreign exchange reserve fell to around $33.84 billion on December 28 from $48 billion in the previous year.

The government and the central bank have taken various measures to increase remittance inflow through formal channels, but the efforts are yet to be successful on a large scale, BB officials said.

On January 1, 2022, the government increased cash incentive on remittance to 2.5 per cent from 2 per cent to encourage migrants to send more money through the banking channel.

The Bangladesh Bank, taking the dollar shortage into consideration, has recently issued a circular saying that the expatriates do not require to show documents for sending any amount of money to the country.

The central bank on September 14 approved floating rate of the dollar that raised the ceiling for collecting remittance to Tk 108.

The interbank exchange rate of the US dollar is ranging at Tk 103-5.

In FY22, the inflow dropped to $21.03 billion from $24.78 billion in the previous financial year 2020-2021 that created a panic on the financial market.

In December, six state-owned bank received $246 million inward remittance, two specialised banks received $38.72 million, and 41 private commercial banks received $1,407.62 million while nine foreign commercial banks received $6.78 million, according to the BB data.

Of the banks, Islami Bank Bangladesh received the highest, $501 million, followed by Agrani Bank $99 million, Al-Arafah Islami Bank $88.85 million, Dutch-Bangla Bank $86.2 million and Sonali Bank $77.73 million.

In FY19 and FY20, the inflow of remittance was $16.42 billion and $18.21 billion respectively.

On November 29, the Bangladesh Bank allowed mobile financial service providers to bring inward remittance in order to increase remittance inflow.