Record February remittances push total to $18.49b

Staff Reporter :

Bangladesh’s remittance earnings have surpassed the $2 billion mark for the seventh consecutive month, recording a remarkable 24 per cent year-on-year growth, reaching $18.49 billion during the July-February period of the current fiscal year 2024-25, according to data released by Bangladesh Bank on Sunday.

In comparison, during the same period of the previous fiscal year, total remittance inflows stood at $14.94 billion, reflecting a substantial increase of $3.55 billion over the last seven months.

In February, Bangladesh received $2.53 billion in remittances, marking the fourth-highest monthly inflow in the country’s history. Additionally, January saw a total remittance inflow of $2.19 billion.

Bank officials note that remittance inflows typically rise during Ramadan and the two Eid festivals, a trend that has continued this year.

This increase has been further supported by a reduced gap between the exchange rates in formal and informal channels, encouraging expatriates to use official banking channels.

The narrowing of the gap between the exchange rates-now down to nearly Tk1, following a rise in the official dollar rate – has incentivised remitters to opt for legal channels.

In late December, the central bank instructed banks to cap the maximum buying and selling rate for remittance dollars at Tk 122. On 27 January, the rate for remittance dollars surged by at least 50 basis points, reaching Tk 122.5 per dollar.

Consequently, demand for informal remittance methods, such as hundi, has decreased in recent months due to a reduction in money laundering, contributing to the rebound in remittance inflows to Bangladesh.

Although remittance inflows declined by 3.2 per cent in July, attributed to political unrest and protests against the Hasina government, they rebounded significantly in the following months.

There were notable increases of 39 per cent in August, 80 per cent in September, and 21 per cent and 14 per cent in October and November, respectively.

December 2024 saw a record high of $2.64 billion in remittances, making it the largest single monthly remittance inflow in Bangladesh’s history.

Compared to the same month in the previous year, December 2024 experienced a 32.66 per cent increase in remittance inflows.

Veteran economist Professor Dr Muinul Islam told The New Nation that the rise in remittance inflows was primarily due to the higher exchange rate and reduced money laundering under the current government, which has positively impacted the country’s foreign exchange reserves.

He further stated that at least 50 per cent of remittances historically arrive in Bangladesh through illegal channels, and using formal channels could further boost remittance inflows.

After remaining around the $21 billion mark for the past two fiscal years, the total remittance inflows reached nearly $24 billion in the 2023-24 fiscal year.