Bangladesh's current account deficit widened in October as imports increased in comparison to receipts from exports and remittances . The pressure on the foreign exchange market continues to rise as a result of the increase in the deficit .
The DailyStar in Dhaka, Bangladesh, December 8: Bangladesh's current account deficit widened in October as imports increased in comparison to the total receipts from exports and remittances, according to The DailyStar.Bangladesh's transactions with the rest of the world are recorded in the current account, particularly in terms of net trade in commodities and services, according to the news release.The pressure on the foreign exchange market continues to rise as a result of the increase in the deficit.According to the DailyStar survey, Bangladesh's current account had a USD 4.5 billion deficit as the end of October, according to the data from Bangladesh's central bank.
According to the DailyStar article, Ahsan H Mansur, Executive Director of the Bangladesh Policy Research Institute, shows that the lower inflow of remittances reflects the ongoing capital flight.According to the story, more than 7.84 lakh male and female employees migrated from Bangladesh to other countries from Bangladesh between January and August in search of jobs.The large number of foreign workers could have played a significant role in boosting remittance earnings.However, the money expended by the workers was only 2.03 percent between July and October. They are conducting illicit activities by enticering migrant workers to transfer money to their families by supplying them with better exchange rates for the US dollar than those offered by Bangladesh banks, which results in an increase in payment that is more than the cost of the shipped items to loot money overseas.Under-invoicing occurs when the price of the goods on an invoice is lower than the price paid for it.If the importer or exporter wants to lower the tariff or if the buyer or seller wishes to reduce their profits by paying less taxes, the over-invoicing and under-invoicing occur.If the remaining capital flight is not stopped, Ahsan H Mansur stressed that it would be difficult to fix the current account deficit. According to Mansur, the vested quarters may have laundered money abroad by embezzling funds from the banking sector.Meanwhile, exports increased by 8% year on year to USD 15.92 billion between July and October.Imports increased 6.72 percent year on year to USD 25.51 billion between July and October.The development comes as the number of letters of credit (LCs) opening in recent months has decreased as banks aren't demonstrating their willingness to accept non-essential and luxury imports. Gross foreign exchange reserves stood at USD 33.78 billion as of November 3, down from USD 44.88 billion a year earlier, a decrease of about 25%.