Despite a surge in the outflow of migrant workers, remittances to Bangladesh declined 10.27 per cent year-on-year to $1.69 billion in May, an unpromising development that may deepen the volatility in the economy.

A Bangladesh Bank official said the hundi cartel, an illegal cross-boundary financial transaction, is mainly responsible for the slide in remittance.

The falling remittances have already created an adverse impact on the country's foreign exchange reserves.

The reserves stood at $29.91 billion today in contrast to $42.20 billion during the same period a year ago.

Remittances, however, slightly increased 1.13 per cent year-on-year to $19.19 billion in the first 11 months of this fiscal year, data from the Bangladesh Bank showed.