Sustaining 5-month growth streak: Remittance inflow rises 13.5pc to $3.12b in Apr

Bangladesh recorded a strong inflow of remittances in April, with expatriates sending home US$3.12 billion, marking a 13.5 per cent year-on-year increase, according to the latest data released by Bangladesh Bank on Sunday.

In April last year, remittance earnings stood at US$2.75 billion, indicating a steady upward trend in migrant income transfers.

However, the April figure was lower than that of March this year, when the country registered a historic high of US$3.75 billion in remittances — the highest ever recorded in a single month.

Bankers attributed the exceptional March surge to increased transfers by expatriates ahead of Ramadan and Eid-ul-Fitr, periods traditionally associated with higher household spending and family support.

Despite the slight month-on-month decline, banking sector insiders remain optimistic.

They view the continued inflow of more than US$3 billion each month as a strong positive sign for the economy, particularly in helping maintain stability in the foreign exchange market.

April also marked the fifth consecutive month in which remittance earnings exceeded US$3 billion, highlighting a consistent and sustained growth trend.

Bankers are projecting a further rise in remittances in May, driven by the upcoming Eid-ul-Adha, which is expected to encourage expatriates to send additional funds to support their families during the festive season.

A key factor behind the rising trend is the narrowing gap between exchange rates in the informal market and official banking channels.

This has encouraged expatriates to remit money through formal systems instead of relying on illegal channels such as hundi.

Bankers emphasised that continued strict enforcement against money laundering and informal transfers would be crucial in sustaining this positive momentum.

In addition, government initiatives aimed at facilitating overseas employment by reducing harassment and simplifying migration processes are expected to further strengthen remittance inflows in the coming months, if implemented effectively.

Recent trends show that remittance earnings have remained consistently strong.

Following March’s record US$3.76 billion inflow, expatriates sent US$3.02 billion in February, US$3.77 billion in January, and US$3.22 billion in December.

This steady rise highlights the growing contribution of migrant workers to the country’s economy and external financial stability.

According to central bank data, total remittance inflows during the current fiscal year have reached US$29.33 billion, compared to US$24.54 billion during the same period of the previous fiscal year.

This represents an increase of US$4.79 billion, or 19.54 per cent, building on an already strong base from last year, when remittances grew by 26.83 per cent.

This continued growth has provided much-needed support to the foreign exchange market.

The strong remittance performance has helped maintain relative stability in the exchange rate, despite global challenges such as geopolitical tensions and rising import costs.

The US dollar has remained stable at around Tk122.75, offering some predictability in the currency market.

Meanwhile, foreign exchange reserves currently stand at US$35.01 billion in gross terms, while reserves calculated under the IMF’s BPM6 methodology amount to US$30.47 billion.

Following a payment of US$1.37 billion on 9 March, reserves had fallen to US$34.10 billion, with BPM6 reserves at US$29.38 billion.

Bangladesh’s reserves had peaked at more than US$48 billion in August 2021.

They later declined significantly, falling to US$20.48 billion under BPM6 and US$25.92 billion in gross terms during a period of economic pressure.

Encouragingly, reserves have since recovered by nearly US$10 billion over the past 18 months under the interim government.

Overall, the sustained rise in remittance inflows, despite periodic fluctuations, continues to play a vital role in supporting Bangladesh’s external sector, easing pressure on the dollar market and strengthening broader macroeconomic stability.