Reserves rise on strong inflows
A sustained rise in remittances and merchandise exports is providing the BNP government with some much-needed breathing space after its first six and a half months in office, helping rebuild Bangladesh’s foreign exchange reserves and ease some of the external pressures weighing on the economy.
The latest figures point to a strengthening flow of foreign currency into the country, with remittances reaching a record monthly level for the year and exports maintaining positive growth.
The improvement comes as the government continues to grapple with high inflation, weak investment and wider macroeconomic pressures.
Remittances, which have remained one of the most resilient pillars of the economy, increased 22.5 per cent year-on-year in August, according to Bangladesh Bank data released yesterday.
Bangladesh received $2.97 billion in remittances from expatriate Bangladeshis during the month, compared with $2.42 billion in August last year.
The August inflow was also 3.77 per cent higher than the $2.85 billion received in July, indicating that the strong flow of overseas earnings has continued into the new fiscal year.
The performance follows a record $35.5 billion in remittances in FY2025-26, strengthening the country’s external position and helping narrow pressure on the current account.
Exports maintain momentum
Merchandise exports have also shown renewed strength.
According to Export Promotion Bureau data released on Tuesday, merchandise exports rose 13.14 per cent year-on-year to $4.43 billion in August 2026, compared with $3.92 billion in the same month a year earlier.
During July-August of FY2026-27, exports increased 5.43 per cent to $9.16 billion, from $8.69 billion during the corresponding period of the previous fiscal year.
The ready-made garment sector remained the main driver of export earnings, although several other sectors also recorded strong performances.
RMG exports rose 13.92 per cent year-on-year to $3.89 billion in August, while shipments during July-August increased 5.12 per cent to $7.50 billion.
Pharmaceuticals, leather goods, jute products, engineering products and footwear also contributed to export growth, reflecting the continued resilience of Bangladesh’s export sector despite difficult conditions in global trade.
The country earned around $48 billion from merchandise exports during the previous fiscal year, highlighting the sector’s continuing importance to the economy.
Reserves show improvement
The combined increase in remittances and export earnings has helped strengthen the country’s foreign exchange position.
Bangladesh’s gross foreign exchange reserves stood at $37.41 billion in the latest Bangladesh Bank data released on Sunday. Reserves calculated under the International Monetary Fund’s BPM6 methodology stood at $32.50 billion.
When Prime Minister Tarique Rahman took office on 17 February this year, the country’s total foreign exchange reserves stood at $34.53 billion. The latest figures therefore show an increase of nearly $3 billion in around six and a half months.
The improvement provides the BNP government with greater room to manage external payments and address pressure on the foreign exchange market, although the reserve position remains well below its previous peak.
Recovery from prolonged reserve decline
Bangladesh’s foreign exchange reserves reached a record $48 billion in August 2021, before falling sharply amid mounting external payment pressures and a prolonged shortage of foreign currency.
By July 2024, reserves had declined to $25.92 billion.
The prolonged pressure was accompanied by a sharp depreciation of the taka. Over the three years leading up to August 2024, the local currency weakened by around 42 per cent against the US dollar.
The latest improvement in remittance and export earnings suggests that foreign currency inflows are gradually strengthening under the new government.
For the BNP administration, the recovery in reserves is an important early indicator of improved external stability. However, sustaining the gains will depend on maintaining strong remittance growth, diversifying exports, containing inflation and restoring confidence in investment and the wider economy.
