Remittance inflow shoots up by 79% to $2.25b in first 19 days of March

HIGHLIGHTS

• $590 million arrives in the last four days
• Ramadan and upcoming Eid increasing remittance inflows
• Expatriates shifting to formal banking channels instead of hundi
• Foreign debt pressure easing

Bangladesh's remittance inflow has witnessed an impressive 78.57% year-on-year growth, reaching $2.25 billion in the first 19 days of March.

During the same period last year, the country's remittance inflow stood at $1.26 billion, Bangladesh Bank Spokesperson Arif Hossain Khan informed reporters yesterday (20 March).

The remittance inflow shot up due to expatriates sending more money to their families marking the month of Ramadan and the upcoming Eid-ul-Fitr, according to bankers.

Additionally, the narrowing gap between exchange rates in the open market and banking channels has encouraged more expatriates to use formal banking systems instead of hundi (informal) channels.

According to central bank data, expatriates sent $20.74 billion in remittances between July 2024 and 19 March 2025, compared to $16.33 billion in the same period of the previous fiscal year — an increase of $4.41 billion or 26.9% in a span of about nine months.

In the first 15 days of March, remittances totalled $1.66 billion, with an additional $590 million arriving in the last four days.

The highest monthly remittance inflow in Bangladesh's history was recorded in December 2024 at $2.64 billion, followed by February 2024 with $2.53 billion, as per central bank data.

A treasury head of a private bank told The Business Standard that the rise in remittances is primarily due to Ramadan and the upcoming Eid, and along with these, a relatively stable dollar market, which has made expatriates more comfortable using official banking channels.

In late January, the dollar rate surged to Tk128, with banks reportedly purchasing remittances at Tk126 due to increased demand. In response, Bangladesh Bank capped the remittance rate at Tk122 per dollar, allowing banks to offer Tk1 more.

At that time, Governor Ahsan H Mansur issued verbal instructions for uniform exchange rates on remittances and exports across all banks. He also mandated a maximum Tk1 spread on dollar transactions, warning of penalties for non-compliance.

Though the country had record remittance inflows in recent months, the volume of reserves in IMF arithmetic has been hovering between $19 billion and $21 billion.

Government payments for essential imports – such as fertilisers, fuel, and power – have increased, with a portion of the remittance inflows being used to cover these expenses, according to central bank sources.

Officials also noted that the high remittance inflow has allowed banks to open a large number of letters of credit (LCs) and make foreign loan repayments smoothly. 

It has also helped stabilise foreign exchange reserves by reducing the need for the central bank to sell dollars.

Overdue payments for foreign LCs have also dropped by 76% to $105 million by the end of February 2025, compared to $445 million on 30 November 2024, according to the central bank data.