Remittance inflow surged by 13.6% year-on-year to $3.13 billion in April, driven by heightened transfers from expatriates preparing for the upcoming Eid-ul-Azha celebration later this month. This pattern of increased remittances prior to the two major Muslim festivals is an annual occurrence in the country.
According to data released by Bangladesh Bank, expatriates have consistently sent over $3 billion for the past five months, a trend attributed to enhanced utilization of formal channels and a rise in remittances from overseas workers. Central bank officials noted that remittance inflows have been on the rise since the change in government in August 2024, signaling sustained growth.
Previously, there had been a rise in demand for informal remittance channels like hundi, but this trend reversed after the interim government assumed office. Despite this positive development, April’s inflow fell short of the record-breaking $3.75 billion received in March.
In the ongoing fiscal year 2025-26 (FY26), remittances have shown robust growth, contributing to the build-up of the country’s foreign exchange reserves. From July to April, total remittance inflows reached $29.33 billion, marking a significant 19.5% increase compared to the same period last year.
Economists anticipate that the continuous rise in remittances could alleviate pressure on the external sector, enhance exchange rate stability, and bolster the overall macroeconomic environment in the coming months. This increase in remittance flows occurs amidst concerns about the potential impact of geopolitical tensions, such as the US-Israel conflict with Iran, on future remittance trends.
Bankers attribute the recent spike in remittances to factors such as the upcoming Eid festival, political stability, and a slightly weaker taka prompting a higher US dollar rate. They emphasize that the collective efforts of the central bank, commercial banks, and Bangladeshi expatriates have contributed to sustaining this upward trend in remittance inflows.
Given the growing remittance trend, the central bank has already acquired over $5 billion from the foreign exchange market in the current fiscal year to manage liquidity and bolster reserves. As of April 30, the country’s foreign exchange reserves stood at $30.47 billion (BPM6), up from $22.02 billion in the corresponding period of the previous fiscal year, as per recent Bangladesh Bank data.
