Author(s)

Mohammad Raselar Rahman, Md. Muhaiminul Islam Selim, Md. Ahsan Ul Haque, Dilruba Yesmin Smrity, Md. Shafiqul Islam^*

Department of Economics, Noakhali Science and Technology University, Noakhali, Bangladesh.

In Bangladesh, remittances have been increasing from its preceding period. It can prevent a balance of payment crises as well as it has a positive impact on the economy of Bangladesh. In this paper, an attempt is made to analyse the effect of exchange rate and overseas employment on remittances in the Bangladesh economy using time series econometric techniques, particularly, vector error correction model to investigate the long-run and short-run relationship among variables where deposit interest rate and global oil price have been used as control variable. The findings show that there is a significant effect of the exchange rate and overseas employment on remittance. The results also show that depreciation of the domestic currency causes remittances to increase in the consequences of Bangladesh, and an increase in overseas employment also has a significant effect on remittances. In the short run, global oil and deposit interest rate can affect remittances because the short-run lagged coefficient of deposit interest rate is significant. An appropriate policy can be taken regarding exchange rate considering the importing cost in mind to inflow remittances in Bangladesh.

Bangladesh, Remittances, Deposit Interest Rate, Overseas Employment, Global Oil Price, Co-Integration, Vector Error Correction Model (VECM)

Rahman, M. , Selim, M. , Haque, M. , Smrity, D. and Islam, M. (2019) Examining the Effect of Exchange Rate and Overseas Employment on Remittances: An Evidence from Bangladesh. Theoretical Economics Letters, 9, 2593-2605. doi: 10.4236/tel.2019.97163.