Remittance hits $24.5b, up 28pc YoY in 10 months of FY25

Staff Reporter :

Bangladesh witnessed a robust 28.33 percent year-on-year growth in remittance inflows during the first ten months of the current fiscal year (FY2024-25), with expatriates sending home $24.54 billion between July and April, according to the latest data from Bangladesh Bank.

This compares to $19.12 billion received during the same period in the previous fiscal year.

In April alone, the country received $2.75 billion in remittances – a 34.6 percent increase compared to the same month last year.

The April surge follows a record-breaking inflow of $3.29 billion in March, largely driven by heightened remittances ahead of Eid-ul-Fitr.

Despite an initial 3.2 percent decline in July, amid political unrest and anti-government demonstrations, remittance inflows have seen consistent monthly growth since August 2024.

Over the past nine months, Bangladesh’s monthly remittance earnings have crossed the $2-billion mark in all but one month, offering much-needed relief to the country’s foreign exchange reserves.

Economists attribute the upward trend primarily to a narrowing of the gap between official and unofficial exchange rates.

With the difference between formal and informal dollar rates falling to around Tk1 – due to adjustments in the official rate – remitters have been increasingly encouraged to use formal banking channels.

Experts also pointed to a decline in informal remittance practices, such as hundi, following the political transition in August 2024.

As illicit money flows decreased with the retreat of politically connected money launderers, the formal sector benefitted.

Veteran economist Professor Dr Muinul Islam told The New Nation that the increase in remittances was largely driven by improved exchange rates and reduced money laundering activities under the current administration.

He noted that up to 50 percent of remittances may have previously been routed through informal channels.

“Encouraging remittance through formal channels is vital. With effective incentives and oversight, Bangladesh could see even greater inflows,” he said.

The positive trend in remittances has significantly bolstered the country’s foreign exchange reserves. According to central bank data, reserves reached $22.04 billion by 30 April, as per the IMF’s calculation method.

Gross reserves, under Bangladesh Bank’s method, stood at $27.41 billion – up from $26.76 billion a week earlier.

Bangladesh had hovered around the $21 billion reserve mark over FY2022 and FY2023. However, the total remittance inflow reached nearly $24 billion in FY2023-24, and is on track to surpass that figure this year.

Economists and policymakers view the sustained growth in remittances as a stabilising factor for the economy, especially amid global uncertainty and domestic fiscal challenges.