Behavior of Remittance Inflows and its Determinants in Banglades

At present, remittances play a crucial role in the economy of Bangladesh. At the macro level, it helps to relieve our foreign exchange constraint, stabilize the exchange rate movement, and improve the balance of payments. A comfortable foreign exchange reserves can be maintained through increasing growth of remittance which can contribute to overall macroeconomic stability and reduce aid dependency. Besides, remittances are used to pay for imports bills and to repay foreign debt. At micro level, remittance has a beneficial impact on household consumption, reducing poverty reduction and self employment. It also improves country’s creditworthiness. However, it has been more stable source of foreign earnings than both FDI and foreign aid. The paper examines the determinants of remittance inflow by applying ordinary least square method (OLS). The paper finds that in the short run there exists a positive relationship between domestic exchange rate and remittance and some regu