Remittance inflow has soared by 29 per cent in July-May period in 2025 compared with that in the same period in the previous year.
According to Bangladesh Bank data, from July 2024 to May 2025 of the 2024-25 financial year, remittance inflow totalled $27.5 billion, marking a 28.7-per cent increase from $21.37 billion in the same period of FY24.
Moreover, the remittance inflow increased to $2.97 billion in May from $2.75 billion in April and $3.29 billion in March.
The sharp increase in March and May has been largely attributed to the Eid-ul-Fitr and Eid-ul-Azha festival, a time when expatriates traditionally send additional funds to support their families back home.
Eid-ul-Fitr, one of the largest religious festivals of Muslims, was celebrated in the country on March 31 while Eid-ul-Azha may be celebrated on June 6.
Remittance inflow remained above $2 billion consecutively from August 2024 to February in FY25.
Bankers said that the reduction in rate gap between official banking channel and informal hundi market was one of the key factors behind the remittance surge.
Previously, a substantial difference between open market and interbank dollar rates prompted many migrants to use informal channels.
The interbank exchange rate rose to Tk 123 a US dollar, up from Tk 110 in December 2023 and significantly higher than Tk 106 in June 2023 and Tk 93.45 in June 2022.
The steady increase in official rates has made banking channels more attractive to remitters, particularly when combined with the government’s incentive package.
Since January 2022, the government has offered a 2.5 per cent cash incentive on remittances sent through formal channels, up from the previous 2 per cent.
After the political shift in Bangladesh on August 5, 2024, remittance inflow through formal channel surged significantly.
Another crucial contributor has been the tightening of regulatory oversight on money laundering and illegal transactions.
The high remittance inflow has helped the central bank repay significant foreign overdue payments by the end of December 2024.
Despite these repayments, the country’s foreign currency reserve, according to the International Monetary Fund guidelines, increased to near $21 billion by the end of May.
This improvement in reserve position offers the central bank some breathing space in managing currency volatility and external debt obligations.
The remittance inflow reached $23.9 billion in FY24, up from $21.6 billion in FY23.
