Remittance and Foreign Exchange
Remittance And Foreign Exchange Operation Of NCC Bank Ltd.
1.1. Introduction:
Remittances to Bangladesh have been growing steadily over the last decade. Since its independence in 1971, more than 3 million Bangladeshis have left the country in search of employment. The central bank estimates their cumulative remittances during 1976-2003 at round US$22 billion (Azad, 2005). Recognizing their economic importance, the government for years has had legislation, policies, and an institutional structure in place to facilitate the migration of its citizens.
Now the question is why sudden importance is put into the perception of remittances? The fact is that the absolute and the relative volumes of workers’ remittances are increasing. They have shown a steady increase over the last decade. The amount of remittance flows to developing countries already surpassed that of official resource inflows. Since 1999, workers’ remittances have been the second largest resource flowing into developing countries after foreign direct investment (FDI). In addition workers’ remittances are not liabilities but cash transfers from overseas, which in principle, they do not cost any to recipient countries. As there has been much debate about external debt and its negative effect on growth, this feature is very attractive force.
Despite the growing interest in workers’ remittances, the role of remittance in development and economic growth in general is not clearly understood. For example, studies based on a country’s time-series data tend to find positive impacts of remittances on growth, but a cross- country/panel data study by Chami et al. (2003) shows the opposite outcome. This is still one of the least studied areas of research in migration literature.
Despite the expanding literature on the subject, there remains an inadequate understanding of a number of issues related to the flow and use of remittances. Thus, there has been little work on the impact of remittances on the
1.1. Introduction:
Remittances to Bangladesh have been growing steadily over the last decade. Since its independence in 1971, more than 3 million Bangladeshis have left the country in search of employment. The central bank estimates their cumulative remittances during 1976-2003 at round US$22 billion (Azad, 2005). Recognizing their economic importance, the government for years has had legislation, policies, and an institutional structure in place to facilitate the migration of its citizens.
Now the question is why sudden importance is put into the perception of remittances? The fact is that the absolute and the relative volumes of workers’ remittances are increasing. They have shown a steady increase over the last decade. The amount of remittance flows to developing countries already surpassed that of official resource inflows. Since 1999, workers’ remittances have been the second largest resource flowing into developing countries after foreign direct investment (FDI). In addition workers’ remittances are not liabilities but cash transfers from overseas, which in principle, they do not cost any to recipient countries. As there has been much debate about external debt and its negative effect on growth, this feature is very attractive force.
Despite the growing interest in workers’ remittances, the role of remittance in development and economic growth in general is not clearly understood. For example, studies based on a country’s time-series data tend to find positive impacts of remittances on growth, but a cross- country/panel data study by Chami et al. (2003) shows the opposite outcome. This is still one of the least studied areas of research in migration literature.
Despite the expanding literature on the subject, there remains an inadequate understanding of a number of issues related to the flow and use of remittances. Thus, there has been little work on the impact of remittances on the