Muhid Hasan :
Amid ongoing macroeconomic challenges, Bangladesh’s economy has received a much-needed boost from rising remittance inflows and robust merchandise export earnings.
Both factors have significantly contributed to strengthening the country’s foreign exchange reserves, stabilising the exchange rate, and improving the balance of payments during the current 2024-25 financial year-largely under the stewardship of the interim government.
According to the latest data from Bangladesh Bank (BB), remittance inflows saw a remarkable year-on-year increase of 28.7 percent, reaching $27.51 billion during the July-May period of FY2024-25. This reflects heightened confidence among expatriates and an improved transfer environment.
At the same time, merchandise exports demonstrated strong growth, with earnings rising by 10 percent year-on-year to $44.94 billion over the same 11-month period, according to the Export Promotion Bureau (EPB). Experts have identified these two sectors-remittances and exports-as the primary drivers behind the improvement in foreign exchange reserves, the overall balance of payments, and the relative stability of the exchange rate.
As of 24 May 2025, Bangladesh’s gross foreign exchange reserves stood at $25.70 billion, compared to $24.16 billion on the same date a year earlier, BB data shows. The central bank now reports reserves using two methodologies. Under the IMF’s Balance of Payments and International Investment Position Manual (BPM6), net reserves were estimated at $20.47 billion as of the same date.
Encouraged by the upward trend, the interim government anticipates gross reserves will climb to $34.4 billion by the end of FY2025-26, largely supported by strong performance in remittance and export sectors.
Bangladesh once held a record-high reserve position of over $48 billion in August 2021, a result of pandemic-era conditions, including high remittance inflows and reduced import expenditure.
However, reserves declined to $25.92 billion by July 2024, as the local currency depreciated by 42 percent. The fall was attributed to factors such as illicit capital flight during the previous Hasina administration, rising global commodity prices, increased import bills, and weakened remittance and export inflows.
To cushion the impact, the central bank injected approximately $27 billion into the foreign exchange market between 2021 and June 2024 to stabilise the taka.
Speaking on Tuesday, BB Executive Director Ahsan H. Mansur reaffirmed that growing remittances and exports are pivotal to the recent improvement in the balance of payments.
The trade deficit also narrowed slightly during the first 10 months of FY2024-25, standing at $18.22 billion-down from $18.70 billion during the same period of the previous fiscal year.
Updated BB figures show the country exported goods and services worth $36.57 billion during July-April, reflecting an 8.6 percent year-on-year increase from $33.67 billion. Imports over the same period rose by 4.6 percent to $54.79 billion, up from $52.37 billion.
Moreover, the current account deficit-a key indicator of a country’s routine external transactions-narrowed significantly to $1.39 billion by the end of April, compared to $6.02 billion during the same period last year. A reduced current account deficit signals less reliance on external borrowing and reflects easing external financing pressures.
