Oil price sucks Bangladesh remittance down
03 February 2015, Nirapad News: The drop in global oil price has affected remittance flow to Bangladesh, one of the main sources of the country’s foreign currencies.
The expatriate Bangladeshis remitted $1.152 billion in January – 12.24 percent less than December and 7.34 percent than January last year.
Bangladesh Bank’s forex department General Manager Kazi Saidur Rahman thinks the downward spiral in oil price has set off the fall in remittance, BDNews24.com reports.
“We receive most remittances from Saudi Arabia, Kuwait and other countries in the Middle-East. These oil-producing countries are in a financial crisis due to the fall in the international oil price,” he said.
“Our expatriates working there had been remitting foreign exchanges they had been earning by doing overtime. But they do not get the jobs now as those countries have cut on spending in the face of the crisis,” he added.
Around 10 million Bangladeshis are working abroad. Of them, over 60 percent is in the Middle-East.
Expatriates in Saudi Arabia send most money back. They remitted around $5 billion in 2014-15 fiscal year.
Rahman said the remittance from Malaysia also dropped due to the devaluation of ringgit.
According to the Organization of the Petroleum Exporting Countries (OPEC), the price of crude oil was $29.69 a barrel on Tuesday.
The oil price has been plunging for over a year, affecting stock markets and leaving global economy tanking. It fell to $22.48 a barrel recently.
The drop in remittance caused by the oil price rout has hit the remittance Bangladesh received in the first seven months (July-January) of current 2015-16 fiscal year.
According to the Bangladesh Bank, the expatriates sent $8.468 billion in this period – down from $8.73 billion of the same period last year.
In 2012-13 fiscal year, the non-resident Bangladeshis remitted $14.46 billion. It dropped to $14.22 billion in the following fiscal year.
The remittance Bangladesh received in 2014-15 hit a new high at $15.31 billion.
On Tuesday, the foreign exchange reserves were $27.25 billion, with which the country can pay import bills of eight months.