BD sees a 68% increase in remittance inflows at the start of January

Bangladesh has recorded a sharp rise in remittance inflows at the beginning of January, providing a boost to the country’s external finances amid ongoing pressure on foreign exchange reserves.

According to data released by Bangladesh Bank on Thursday, expatriate Bangladeshis sent home US$907 million in the first seven days of January, marking a year-on-year increase of 67.8 per cent. In the same period last year, remittances stood at $541 million.

Central bank officials said the strong growth reflects a combination of improved exchange rates, increased use of formal banking channels and seasonal factors, including year-end settlements by overseas workers.

The upward trend is also visible over the longer term. Between July and 7 January of the current fiscal year, total remittance inflows reached $17.17 billion, compared with $14.32 billion during the corresponding period of the previous fiscal year — an increase of nearly $2.9 billion.

Economists say recent policy adjustments, including a more market-aligned exchange rate and tighter monitoring of informal money transfer systems, have helped redirect remittance flows through official channels. The government has also continued to offer cash incentives on remittances sent via banks, which analysts believe has further encouraged formal transfers.

Remittances are a critical source of foreign exchange in Bangladesh, helping to finance imports, service external debt and support household consumption. Strong inflows are particularly significant at a time when the country is working to stabilise its currency and rebuild its reserves following global price shocks and elevated import bills.

Bangladesh Bank has been gradually moving towards a more flexible exchange rate regime under reforms agreed with the International Monetary Fund (IMF). Officials say higher remittance inflows strengthen the central bank’s ability to manage exchange rate volatility without imposing heavy market controls.

Market analysts caution, however, that sustaining momentum will depend on global labour market conditions, demand for Bangladeshi workers abroad and continued confidence in the formal financial system.

The central bank is expected to continue closely monitoring remittance trends in the coming months as part of its broader strategy to stabilise the external sector and support economic recovery.