Economy
Remittance drops again in Oct
Remittances dropped again in October, clocking $1.52 billion – down 7.4pc on the same month last year, according to the latest figures released by Bangladesh Bank.
Remittances had dropped year-on-year by 10.84pc to $1.54 billion in September – a 7-month low at the time. It means the October figure is now the lowest in 8 months.
Yet thanks to the strong showing in two months (July-August) of the current fiscal.
According to the latest data from the central bank, inward remittances totaled $7.19 billion in July-October of FY23, slightly edging the $7.05 billion received in the same period last year, by barely 2pc.
Bangladesh Bank spokesperson Md Abul Kalam Azad said in order to rise inflow, the central bank has increased the exchange rate of the US dollar offered on remittances.
That is on top of a 2.5pc hassle-free incentive already in place, while several banks also provide their own additional incentives to attract foreign exchange, Azad pointed out.
These however have failed to arrest the slide in remittances witnessed since September. Before that, remittances topped $2 billion in both July ($2.09 bn) and August ($2.03 bn).
Economists have been concerned that the unofficial or hundi channels may become more active in light of Bangladesh Bank’s September 12 decision to fix 3 different rates for the dollar – one each for remittances, exports, and imports. The October remittance figure will add to those concerns.
Ahsan H. Mansur of the Policy Research Institute, a leading think-tank, told that remittances are on the decline due to remitters getting better rates through the unofficial channels, whereas banks are unable to offer them more than the Bangladesh Bank-fixed Tk 107 for each dollar.
Dr. Mansur has been critical of the move to adopt three different rates for the dollar from the start and insisted on the need to return to a single interbank rate, instead of the multiple rates fixed by the central bank in cooperation with the Association of Bankers Bangladesh, and BAFEDA – the association of foreign exchange dealers.
He has always held it to be a misguided policy because it “discriminates against small remitters” – precisely the ones who would seem to be moving away from the official channels since September.
Now the noted economist does not expect to see a change for the better till remitters can be offered a more competitive exchange rate.
Even so, the central bank remains eager to induce remittances through official channels as it reels from the dollar crisis and the declining trend of forex reserves.
The reserve figure is now below $36 billion, according to Shapla Chattor’s own count, even as the IMF continues to insist, and most economists agree, that the globally accepted way of calculating reserves would subtract another $8 billion from that figure.
/NR
The Kazipara and Mirpur-10 metro stations, which have been closed, are expected to reopen by the end of September, though the exact date has not yet been confirmed. Mohammad Abdur Rauf, Managing Director of Dhaka Mass Transit Company Limited (DMTCL), told TBS that a technical team has been tasked with resolving the issues at the stations.
“We are working to reopen the two stations within this month, but I cannot give a specific launch date yet. We will hold a meeting with the technical team and other stakeholders soon to review the progress. A decision is likely on 18 September,” Rauf said.
He noted that Kazipara station is likely to open earlier due to less severe damage, while Mirpur-10 may face delays as it requires machinery that needs to be imported.
Additionally, Rauf mentioned plans to begin metro rail operations on Fridays starting from 20 September, with efforts being made to meet this timeline.
Dr. Muhammad Yunus, the Chief Adviser of the interim government, has announced the formation of six commissions as an initial step toward reforms, including constitutional amendments. These commissions are expected to begin operations on 1 October and complete their work within three months.
In an address to the nation on Wednesday evening (11 September) from the Chief Adviser’s Office, Yunus outlined the government’s reform agenda. This is his second national address since taking office on 8 August.
Yunus explained that the formation of the six commissions is the first step in a broader plan for constitutional reform. He stated that the commissions would be led by six distinguished citizens, selected based on their expertise. These commissions will tackle various reform areas, and more will be established in the future.
Emphasizing the importance of constitutional reforms for free and fair elections, Yunus stated, “We believe that imposing majority rule through elections, resulting in misgovernance or consolidating all power into the hands of one person, family, or group, is unacceptable. To prevent this, we are considering reforms to institutions like the Election Commission and others involved in the election process. Reforming the police administration, civil service, judiciary, and Anti-Corruption Commission is essential for ensuring fair and transparent elections. These reforms will also contribute to establishing a state system based on public ownership, accountability, and welfare.”
Yunus announced the names of the six commission heads:
- Dr. Badiul Alam Majumdar will lead the Election System Reform Commission.
- Sarfaraz Chowdhury will head the Police Administration Reform Commission.
- Justice Shah Abu Naeem Mominur Rahman will lead the Judiciary Reform Commission.
- Dr. Iftekharuzzaman will lead the Anti-Corruption Reform Commission.
- Abdul Muid Chowdhury will head the Public Administration Reform Commission.
- Dr. Shahdeen Malik will lead the Constitutional Reform Commission.
The Chief Adviser mentioned that the other members of these commissions would be determined in consultation with the heads. Additionally, representatives from the advisory council, students, workers, social movements, civil society, and political parties will participate in the commissions’ discussions.
Yunus expressed hope that the commissions would be fully operational by 1 October and complete their work within three months. Based on the commissions’ reports, the government plans to organize consultations with major political parties. A broad consultation, lasting three to seven days, involving students, civil society, political party representatives, and the government will follow. This consultation will finalize the reform framework and outline its implementation strategy.
Yunus concluded by stating that this initiative will unify the nation, fulfilling the demands of the July uprising and strengthening the country with renewed hope and optimism.
The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has urged the Bangladesh government to implement a more investment-friendly tax structure to enhance foreign investor confidence.
During a meeting on Wednesday (11 September) with the newly appointed chairman of the National Board of Revenue (NBR), Abdur Rahman Khan, FICCI leaders highlighted the need for comprehensive tax reforms that would position Bangladesh as a more attractive destination for foreign direct investment (FDI) and strengthen the national economy.
Zaved Akhtar, President of FICCI, stressed the significance of fully digitising NBR operations, particularly by advancing automation systems to maximise revenue collection, as outlined in the chamber’s press release.
The delegation also recommended the establishment of a dedicated research unit within the NBR to broaden the tax base and increase revenue through in-depth market analysis, identifying gaps between market share and revenue generation.
NBR Chairman Abdur Rahman Khan acknowledged the importance of automation in stimulating economic progress and welcomed FICCI’s research findings on the taxation landscape.
FICCI’s delegation included Senior Vice President Eric M. Walker, other board members, and senior officials from member companies, alongside key officials from the NBR.
