Exports slide 4.61% in September but higher remittance offers relief
Economists say the contrasting trends underscore the economy’s heavy dependence on a few external sources and the growing need to diversify both products and destinations
Bangladesh's two major external lifelines – exports and remittances – moved in opposite directions in September, painting a mixed picture of the economy's external health.
According to data released by the Bangladesh Bank and the Export Promotion Bureau (EPB) on Sunday (5 October), remittance inflows rose by 11.67% year-on-year to $2.69 billion, while merchandise exports fell by 4.61% to $3.63 billion, weighed down by a slump in readymade garment (RMG) shipments.
EPB figures show that knitwear exports fell by 5.75% and woven garments by 5.54%, reflecting weaker demand in major markets amid a global slowdown and buyers' inventory adjustments. Non-RMG sectors showed limited growth, insufficient to offset the contraction in apparel exports, which account for over 84% of total earnings.
Economists say the contrasting trends underscore the economy's heavy dependence on a few external sources and the growing need to diversify both products and destinations.
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Despite the monthly fall, exports during the first quarter of FY26 grew by 5.56%, reaching $11.66 billion, EPB data showed.
Meanwhile, riding on the higher remittance inflow and export growth, Bangladesh Bank's gross foreign currency reserves have surpassed $26.5 billion.
Remittance shoots up
Central bank figures show the highest-ever monthly remittance of $3.29 billion was recorded in March this year, followed by $2.96 billion in May – the second-highest in history.
Bankers and economists attributed the rise in remittance through banking channels mainly to the sharp decline in hundi (illegal money transfer). Since August 2024, expatriates have been sending over $2 billion every month. Several politically connected individuals involved in hundi operations have also been arrested.
The higher dollar rate offered by banks compared to earlier periods has further encouraged remitters to use legal channels.
Economists noted that Bangladesh Bank has been able to stabilise the foreign exchange market – a positive sign for the financial sector. However, they warned that maintaining discipline in the sector will be a major challenge for the next elected government. A return of the dollar crisis could harm the economy, they said.
Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), said, "Remittance inflow has been quite good over the past year. The main challenge now is to sustain this momentum."
She added, "There were various irregularities under the previous government, but better practices have now begun. The concern remains whether an elected government will continue these positive measures. Efforts are being made to ensure good governance – that should remain an objective for all political parties."
Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said, "The rate offered for remittance through banks is much higher now, so the gap between open market and banking channels has narrowed. Previously, import bills were often settled through hundi after opening LCs, but that practice has disappeared. As a result, remittance flow through banks is increasing."
Md Touhidul Alam Khan, FCMA, managing director and CEO of NRBC Bank PLC, told The Business Standard, "After the new interim government formed, migrant workers grew more confident in official channels. Diplomatic ties with labour-exporting countries improved, and incentives for remittances via banks were maintained.
"Besides, strict monitoring reduced illegal hundi transactions, while banks and exchange houses offered faster, more convenient transfer services along with favourable exchange rates – motivating workers to send money officially."
He added, "Expansion of overseas job opportunities and awareness campaigns further encouraged legal remittances. Economic stabilisation boosted trust, and digital banking made sending money safer and easier."
Bangladesh Bank data show that from July to 30 September of the current fiscal year, expatriates sent $7.59 billion in remittances – compared to $6.54 billion during the same period last fiscal year, marking a 15.9% growth.
Forex reserves reach $26.62b
Bangladesh Bank's gross foreign currency reserves have surpassed $26.5 billion, the central bank's spokesperson and executive director Arif Hossain Khan told reporters today (5 October).
According to the International Monetary Fund's BPM-6 calculation method, the country's gross reserves now stand at $26.62 billion.
As of 24 September, the reserves stood at $26.39 billion, Bangladesh Bank data show.
A senior central bank official said the rise in remittance inflows and export earnings has increased the supply of dollars in the banking system. After selling dollars to other banks, many commercial banks are also selling their surplus dollars to the central bank, adding to the reserves.
Arif Hossain Khan told The Business Standard, "Reserves are increasing due to higher remittance inflows and the central bank's dollar purchases from commercial banks through auctions."
Reciprocal tariff bites
Exporters mainly blamed the decline in orders from US buyers on the reciprocal tariffs imposed by the US, which remains the single largest market for Bangladeshi goods, about 20% of Bangladesh's export destination.
After the US finalised a 20% reciprocal tariff on Bangladeshi goods in early August, local exporters had hoped for a surge in orders, believing that Bangladesh was in a somewhat better position compared to its competitors. However, exporters say they have witnessed the opposite.
"What we had expected is turning out to be the opposite in reality – US apparel orders to Bangladesh have decreased rather than increased," said Inamul Haq Khan Bablu, Senior Vice President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), while speaking to The Business Standard.
He added, "US consumer spending has slowed due to the high tariff. Clothing consumption is declining, and buyers are not placing new orders because of it."
"Traditionally, August, September, and October are lean season for Bangladesh's apparel exporters, but we did not expect such a decline," said Bablu, who is also the Managing Director of Ananta Garments Limited, one of the country's leading RMG exporters, adding, "Other than the US market, our export orders have not been significantly affected."
He, however, expressed hope that apparel orders would return to normal from November onward.
Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), echoed the same concern.
"Due to the reciprocal tariff, US buyers are delaying or reducing orders as they negotiate to shift part of the tariff burden onto Bangladeshi suppliers. We also learned that retail sales in the US market have dropped," Hatem told TBS.
Hatem cautioned exporters not to reduce prices further, saying, "Most exporters already operate on very thin margins. In some cases, they are taking orders at break-even point or even at a loss. It's practically impossible for them to absorb the impact of the US reciprocal tariff."
According to BGMEA, Bangladeshi RMG exporters now pay an average of 36.5% in duties and tariffs – including the new 20% reciprocal tariff – which was originally supposed to be borne by the buyers.
However, several US buyers are reportedly trying to pass on 5%-7% of the new tariff to Bangladeshi suppliers, a fact acknowledged by both exporters and buyers' representatives who spoke to The Business Standard recently.
Rakibul Alam Chowdhury, Managing Director of Chattogram-based HKC Apparels, said he has refused to shoulder the additional cost imposed by US buyers, whose orders make up over 90% of his company's exports to the American market, leaving many orders unconfirmed.
"Our profits are minimal – sometimes just at break-even," said Rakibul, whose factory employs 6,500 workers. "We cannot take loss-making orders. If necessary, we may reduce factory size, but further losses are unsustainable."
EPB data shows that Bangladesh's exports stood at $3.63 billion in September 2025, down from $3.80 billion in the same month last year – marking a 4.61% year-on-year decline.
Besides RMG, exports of several other products – including agricultural goods, chemical products, plastics, cotton and cotton goods, specialised textiles, home textiles, and footwear – also declined year-on-year in September.
However, exports of frozen and live fish, as well as leather and leather goods, registered growth during the month.
