Written by The Banking Post
Bangladesh has received a record $17.17 billion in inward remittances in the first six months and seven days of FY2025–26, reinforcing the strength of overseas earnings and providing vital support to the country’s foreign exchange reserves amid global trade uncertainties.
The inflow marks a sharp rise from about $14.31 billion in the same period of the previous fiscal year, reflecting an increase of $2.86 billion, or nearly 20 per cent. The momentum builds on FY25, when annual remittances crossed the $30 billion mark for the first time.
Bangladesh Bank officials attribute the sustained growth to a mix of policy reforms and changing remitter behaviour. Confidence in formal banking channels has strengthened following political transitions late last year, prompting many expatriates to move away from illegal hundi transfers.
Greater transparency, a sense of economic responsibility among non-resident Bangladeshis and the stabilisation of the taka against the US dollar have also played key roles. With a market-based exchange rate in place, remitters are no longer holding back transfers in anticipation of abrupt currency depreciation.
Government incentives remain a strong pull. The continued 2.5 per cent cash incentive has encouraged low-income migrant workers to use official channels, while expanded digital remittance services—ranging from mobile financial platforms to fintech solutions—have made transfers faster and more accessible, especially from the Middle East and Southeast Asia.
Monthly data show consistently strong inflows: $2.47 billion in July, $2.42 billion in August, $2.68 billion in September, $2.56 billion in October, $2.88 billion in November and a peak of $3.22 billion in December. Average monthly inflows have exceeded $2.4 billion so far this fiscal year.
Economists say the surge is helping offset recent weakness in exports, which saw a slight contraction in December, and is likely to support consumption and GDP growth in 2026. Strong remittance inflows are also giving policymakers greater flexibility, including room to reassess external borrowing under tight conditions.
As of early January, gross foreign exchange reserves stood at around $33 billion under traditional calculation, boosted significantly by remittance inflows. The higher reserve cushion is easing pressure on external debt servicing and import payments.
Bankers say restored confidence in the financial system, exchange rate stability and a normalised curb market have sharply reduced the appeal of hundi transactions. With illegal channels offering no incentive benefits, remitters are increasingly choosing formal routes to send money home.
