Foreign nationals' credit card spending drops amid political unrest
Spending by Bangladeshi nationals outside the country increased by 4.5% in September
Credit card spending by foreign nationals declined nearly 13% in September with travel to Bangladesh slowing amid the ongoing political unrest.
Bangladesh Bank data show that foreigners spent Tk190 crore in September, down from Tk218 crore in August.
US nationals, who accounted for the highest amount of credit card spending among foreigners in Bangladesh, saw a drastic fall in card transactions, contributing to the overall decline in expenditure by foreign nationals.
Credit card transactions by US nationals in Bangladesh saw a decline of almost 24%, dropping from Tk55 crore in August to Tk42 crore in September, as per the Bangladesh Bank report, "An Overview of Credit Card Users' Spending Pattern within and Outside the Country."
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While credit card transactions by foreign nationals within the country decreased, spending by Bangladeshi nationals outside the country increased by 4.5% in September compared to the previous month, even despite the dollar crisis.
The central bank report reveals that Bangladeshi nationals spent more than twice the amount abroad compared to what foreign nationals spent within the country.
In September, total spending by Bangladeshi nationals through credit cards outside the country amounted to Tk437 crore, showing an increase from the Tk418 crore in August.
Shedding light on this spending behaviour, Syed Mahbubur Rahman, managing director of Mutual Trust Bank, explained that the use of credit cards outside the country has risen as travellers opt for card transactions amid a cash dollar crisis.
Additionally, he pointed out that the cash dollar rate is higher than the official rate, motivating travellers to prefer credit card spending when abroad.
On the other hand, credit card spending by foreign nationals declined due to fewer foreigners travelling owing to the political movement leading up to the election, he added.
A senior executive involved in preparing the report on credit card usage told The Business Standard that spending through credit cards by foreign nationals within the country has declined due to the global economic crisis.
Furthermore, the ongoing political unrest has worsened the situation, as fewer foreigners are now travelling to Bangladesh, according to the executive, who wished not to be named.
He said that the government, along with the Bangladesh Bank, has limited foreign travel for government officials to curb the outflow of dollars through credit cards. However, he noted that they cannot impede the travel plans of the general public.
Despite the dollar crisis, the travel quota for Bangladeshis remains unchanged at up to $12,000 per year for spending outside the country. The Bangladesh Bank has maintained this limit, even in the face of the ongoing dollar crisis.
