Forex Reserve marks 24%, remittance 11.27% rise in 2014

The latest BB data showed that the foreign exchange reserve stood at $22.34 billion on December 23, which was nearly 24 percent higher than $18.04 billion on December 23, 2013.

The reserve, however, reached at all-time of $22.38 billion on December 18 this year. The record reserve was supported by the steady remittance inflow and export growth.

As of December 26, 2014 Bangladeshi people living overseas sent home $14.71 billion against $13.22 billion last year, which was 11.27 percent higher on year-on-year basis.

The country also saw the highest ever inflow of monthly remittance in July this year with the amount hitting as high as $1492.47 million ($1.49 billion). BB officials concerned said the actual remittance receipt might cross $15 billion when the total amount for December would be available.

The Migration and Remittances Unit of the World Bank (WB) earlier projected that Bangladesh would receive over $15 billion in remittance in 2014 and the inflow would increase further in future if Saudi Arabia and the United Arab Emirates (UAE) resume Bangladeshi labour recruitment.

At the initiative of Prime Minister Sheikh Hasina, Saudi Arabia in February this year lifted the ban on change of Iqama (work permit) for switching jobs.

Bangladeshi workers were not allowed to change their work-permit in the past six years since 2008.

The country also resumed recruiting Bangladeshi workers initially with house-help and drivers. During the recent visit of Sheikh Hasina, UAE also signed a deal for recruiting between 1,000 and 2,000 female household workers a month from Bangladesh.

These developments would help increase overseas employment and eventually the remittance inflow to the country.

According to the Bureau of Manpower, Employment and Training (BMET), some 411,000 Bangladeshis found jobs overseas between January and December 22 this year, marginally higher than 409,253 last year.

The record amount of reserve and steady remittance inflow in 2014 boosted the country's GDP (gross domestic product) outlook, supported the current account balance and helped offsetting the high-reliance on the garment exports, according to some study reports.

Global credit rating agency Moody's in a report said that Bangladesh achieved positive rating because of its strong reserve and remittance inflow, which also suggested a bolstering of the sovereign's external payments position.

With the steady inflow of remittance, Bangladesh became the eighth biggest remittance recipient country in the world when Moody's projected the remittance inflows would push GDP growth at higher level.

The international rating agency also said the higher remittances helped offset the trade deficit and counterbalanced the lack of diversification in the export, which is highly reliance on garment and textile sectors.

The higher reserve and the remittance inflow also helped local currency Taka to remain strong this year with the interbank exchange rate against US dollars hovering around 77.90 till December 19.