In a significant boost to the country’s economy, Bangladesh received $2.53 billion in remittances in February, marking the fourth-highest monthly inflow in history. The surge represents a 25% increase compared to the same period last year and has been attributed to the rise in remittances ahead of Ramadan, a time when expatriates typically send more money to support their families stated in a report.
The highest-ever monthly remittance inflow was recorded in December last year, reaching $2.64 billion. The second-highest was $2.59 billion in July 2020, followed by $2.54 billion in June 2024.
Efforts to boost remittance inflows continue, with financial institutions working to strengthen ties with local and foreign exchange houses. The recent surge is largely driven by expatriates opting for formal banking channels, encouraged by competitive exchange rates and stricter controls over informal remittance methods.
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The increase in remittances has contributed to strengthening the country’s external balance. After a prolonged deficit, the balance of payments’ current account turned into a surplus in December. The continuation of this upward trend is expected to further ease pressure on foreign exchange reserves and improve overall economic stability.
From July to February of the current fiscal year, total remittance inflows reached $18.49 billion, reflecting a 23.8% increase compared to the same period in the previous fiscal year. The rising trend has been reinforced by regulatory measures aimed at controlling exchange rates and reducing reliance on informal transactions.
Financial institutions observed that remittance inflows remained stable throughout February, supported by tight regulatory control over exchange rates. At the end of January, the remittance dollar rate briefly surged to an all-time high of Tk128. However, interventions led to a decline, bringing the rate down to below Tk122 in early February. Currently, transactions are taking place at approximately Tk 122.60 – Tk 122.70 per dollar.
The narrowing gap between official exchange rates and informal hundi transactions has encouraged more expatriates to use legal banking channels. With the demand for dollars in informal transactions declining and financial institutions offering competitive rates, formal remittance inflows are expected to maintain their upward trajectory.
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