Remittance surges 30% in July

Remittance surged 30 percent year-on-year in July, the first month of the current fiscal year, maintaining buoyancy in inflows as more than 40 lakh Bangladeshis have gone abroad for work over the past four years.

Last month, the country received $2.47 billion in remittances from Bangladeshi nationals staying abroad, helping the nation gradually recover from its foreign exchange crisis and improve its Balance of Payments, which records all transactions with the rest of the world.

Bangladesh, which faced a shortage of foreign currencies for more than two years, received $1.91 billion in July 2024, according to data from the Bangladesh Bank (BB).

Hundi, an illegal cross-border transaction method, has declined, likely after the political changeover

However, July's inflow was 12.22 percent lower than in June, as many remitters had sent more money home ahead of Eid-ul-Azha.

Industry insiders credited the rise in remittance inflows to several factors, including a narrowing gap between official and informal exchange rates, tougher action against money laundering, and a renewed sense of patriotism among expatriates following the political changeover in August last year.

A central bank official said hundi, an illegal cross-border transaction method, has declined, likely after the political changeover, which has led to more remittances being routed through formal banking channels.

According to BB, Islami Bank Bangladesh received the highest amount in July, at $533 million, followed by Agrani Bank, Bangladesh Krishi Bank, BRAC Bank, Janata Bank and Trust Bank.

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Remittance flows over $30 billion in FY25

By May of the current fiscal year, more than 9 lakh migrant workers had left the country. A year earlier, 12 lakh Bangladeshis went abroad for jobs, the highest on record, according to the Bureau of Manpower, Employment & Training (BMET).

"The prevailing market-driven competitive exchange rate, strict oversight dismantling informal networks, and accessible agent banking and mobile financial services helped boost remittance inflow in this period," said the BB in its monetary policy for the July-December period.

In fiscal year FY25, remittance inflow hit a record $30 billion, posting a 27 percent growth.

With rising remittances, steady exports and slower imports, the overall Balance of Payments posted a $3.3 billion surplus at the end of FY25, reversing a $4.3 billion deficit the year before.

As of July 31, the country's foreign exchange reserves stood at $24.77 billion, up from $20.48 billion (BPM-6) during the same period last year, according to central bank data.

A BB official said hundi, an illegal cross-border transaction system, declined—likely due to the political transition—leading to more remittance inflows being directed through official channels.