Expats sending less as currencies lose value
November 10, 2008
Asif Showkat.
Non-resident Bangladeshis are keeping a tight hold on their money as major currencies are losing value amid a global financial crisis that rings an alarm bell for recession.
Central bank sources said inward remittances from Bangladeshis working abroad fell by 17.40 per cent in October than in the previous month mainly due to the decline in exchange rates of the euro and the Great Britain pound against the US dollar.
‘Bangladeshi currency has slightly appreciated against the US dollar, which also is seen less rewarding for remitters. So, NRBs have chosen to send less money home until the currency market situation changes,’ said a senior official of Bangladesh Bank.
The official, however, said that they expected the flow of inward remittances would increase this month ahead of the Eid-ul-Azha festival.
Remittances traditionally surge ahead of eid festivals when Bangladeshi expatriates send more money home to help their families meet eid expenditures. In September, the month before the Eid-ul-Fitr, NRBs sent home $794.18 million.
But the amount fell to $655.98 million in October, according to the central bank statistics released last week.
Taka has gained against four major currencies amid a global economic turmoil that rattled financial markets in the USA, Europe and Asia. The local currency got its position stronger against Great Britain pound, euro, Pakistani and India rupees, while it gained slightly against the US dollar and declined against the Japanese yen.
‘The economic situation of Middle East countries would not deteriorate immediately as the international oil cartel will reduce their production to stabilise the global oil market,’ said Mustafa K Mujeri, chief economist at the Bangladesh Bank.
He said that currently oil demands in the developed countries were declining, causing drastic fall in oil prices.
Another central bank official, however, felt that global financial crisis would affect Bangladesh’s remittance incomes.
The declining trend is evident in the accounts books of commercial banks, which were channelling less remittance into the country now than in the previous months before the global crisis surfaced.
The country’s export earnings might also be affected if the crisis prolonged, economists and business leaders earlier warned.
Central bank officials, however, did not see any reason to fear that the declining trend in remittance inflow would affect the country’s inter-bank foreign exchange market, since banks are now facing much less pressure for opening import letters of credit.
Bangladeshi expatriates sent $2.992 billion in the first four months of the current fiscal, 36.80 per cent higher than the amount sent in the same period last year.
The country’s foreign exchange reserve stood at $5.10 billion on Tuesday after a routine payment of $500 million to the Asian Clearing Union, officials said.
Courtesy: NewAge (newagebd.com)
More links realated to this topic
Comments
Got something to say?
You must be logged in to post a comment.