$2.86 Billion Remittance Inflow Decline Raises Concerns About Bangladeshi Foreign Currency

Remittance inflows to Bangladesh declined for the second straight month in July, reaching $2.86 billion according to data released by the central bank. This is a drop from the previous months' totals, including June's $2.82 billion and May's $3.425 billion.

The decline has raised concerns among bankers who point out that remittances are one of Bangladesh's largest sources of foreign currency. They note that despite no significant increase in overseas employment, monthly inflows had remained above $3 billion for six straight months until now.

Islami Bank was the largest remittance-collecting bank, followed by Bangladesh Krishi Bank. The drop may have been contributed to by tighter monitoring of commercial banks that were purchasing remittance dollars at higher rates, as well as the impact of the Middle East crisis on the value of the US dollar.

Eight leading economists recently advised Bangladesh Bank to preserve the country's foreign exchange reserves and avoid an immediate cut in the policy interest rate. However, the central bank has since reduced its policy interest rate despite these recommendations.