Receipts up 35 percent in August, spiraling foreign exchange reserves to a record $39.4 billion
Remittance continued its incredible run last month, with migrant workers sending home about $2 billion.
Last month's inflows were about 35.2 percent higher than a year earlier, according to data from the Bangladesh Bank.
When the global coronavirus pandemic took root, remittance, one of the masts of the Bangladesh economy, was primed to take a pounding. But the reality turned out to be vastly different.
After sending home a record $18.2 billion last fiscal year, migrant workers carried off where they left in fiscal 2020-21: they sent home $2.6 billion in July, which is a record for a single month.
August's receipts take the remittance inflows so far this fiscal year to $4.6 billion, up 50 percent from a year earlier.
With the surge in remittance inflows, lower imports, and injection of budget support from external sources, the country's foreign exchange reserves today stood at $39.4 billion – a record.
The development means the urge to use the reserves to bankroll large major projects will grow stronger.
Earlier on July 6, Prime Minister Sheikh Hasina floated the idea at the meeting of the Executive Committee of the National Economic Council.
The reasoning was the reserves were soaring and Bangladesh has to borrow from external sources to finance large projects. Instead of borrowing, the sums sitting idle could be put to use.
The finance division and the central bank would the possibility of using the reserves for this end, Planning Minister MA Mannan told reporters after the Ecnec meeting then.
The prime minister's proposition has precedents though, according to Ahsan H Mansur, executive director of the Policy Research Institute.
Some other countries like Qatar and Malaysia have invested reserves for infrastructure development, he said.
"In our country, forex reserves can be invested in public-private partnership projects like the second Padma Bridge or Jamuna Bridge," he added.