Bangladesh Banks Directed to Increase USD Rate for Inward Remittance

July 30, 2024 - The Bangladesh Bank has instructed several banks to offer higher exchange rates for US dollars to boost inward remittance inflows. The move follows a significant drop in remittance receipts, partially due to a recent five-day internet blackout that disrupted banking and mobile financial services. Banks previously offering up to Tk 118 per USD have increased their rates to Tk 118.50 - Tk 118.70 per USD. This step is aimed at mitigating the ongoing forex crisis and stabilizing the country’s financial situation.

Central bank data shows that remittance inflows for July have been lower compared to previous months, with $978 million received by mid-July compared to $2.54 billion in June. The Bangladesh Bank’s decision is part of a broader strategy to encourage remittance through formal channels and address the economic challenges posed by the forex shortage.

The recent internet blackout, which began on July 18 and lasted until July 23, significantly disrupted remittance collection, exacerbating the financial strain. Despite the resumption of services, banks and mobile financial service providers are still struggling to return to normal levels of remittance inflows.

Bank executives have indicated that this measure is essential for enhancing forex collection from remittances and export earnings, anticipating further increases in USD rates. The Bangladesh Bank’s spokesperson has acknowledged the ongoing disruptions and highlighted the need for continued efforts to stabilize remittance flows.

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