Forex Reserves Strengthened by Record Remittance Inflow
Within just eleven months of the interim government, Bangladesh's foreign currency reserves have gone up from less than US$20 billion in 2024 to over $31 billion by June 2025, indicating that the country is now going well through an economic recovery phase. During this period, the record inflow of remittances into the country's national reserves has substantially contributed to the stability of institutions, easing of the liquidity crisis, and other economic activities. Economists and experts observed that the record inflow of remittances has been an important bellwether of Bangladesh's economic recovery. According to the Bangladesh Bank's latest data, the country's gross reserves have risen to $31.72 billion by July 2, 2025. However, as per the International Monetary Fund (IMF) methodology under the Balance of Payments and International Investment Position Manual (BPM6), Bangladesh's net reserves currently stand at $26.67 billion.
The surge came after a significant increase in remittance inflows, which reached $30.33 billion in the outgoing fiscal year 2024-25 (FY25), marking the highest amount ever received in a single fiscal year in the country's history. This figure reflects a 26.80 percent increase compared to the $23.91 billion received in the previous fiscal year (FY24). It surpasses the earlier record of $24.77 billion received in FY 2020-21 during the Covid-19 pandemic, when remittances spiked due to restrictions on informal hundi channels and the introduction of incentive bonds. A record $3.29 billion in remittances came through the banking channel in March 2025, the highest in a single month in the country's history. In continuation of this, more than $2 billion in remittances have arrived in the country each month of the last fiscal year (FY25). A senior official of the central bank said that reserves are rising due to the declining trend in money laundering, a good flow of expatriate income, and high growth in exports.
"Almost eleven months ago, the interim government came to power, promising to bring changes across the board. A number of policy measures have been taken to reform the national economy, organizations, and administration, thus establishing a strong system of fostering public spirit," he said. He added that the dollar exchange rate has remained stable at around Tk 122 for a long time, which is also a positive aspect. "The main reason for the decline in the dollar price is the increase in supply. The supply of dollars is now at its best over the last two years," he noted. The Bangladesh Bank official said several factors contributed to the sudden surge of remittances in Bangladesh. "While the government took a range of initiatives to tackle price manipulation under the capital market, defying the norm, surging exports reaching a staggering amount of $48 billion has also contributed to this rise," he mentioned.
He said non-residents or Bangladeshi expatriates also felt motivated to send remittances legally through the banking channel. Renowned economist Dr Zahid Hussain said the surge in remittances has played a crucial role in replenishing the reserves, providing much-needed relief to the economy. "Due to the dollar crisis, Bangladesh's economy faced a lot of problems. It was difficult to open letters of credit (LCs) for banks. Now everything is gradually becoming normal," he added. After taking office, Dr Zahid, also the former lead economist of the World Bank Dhaka office, mentioned that the interim government started to restore regulations in the banking sector, supported distressed institutions from falling further, and took initiatives to bring back laundered money from abroad. The government has advanced a lot in freeing the banking sector from the clutch of business conglomerates, he said. "We're going towards a more or less stable condition, but I won't say the crisis is over," he added.
Deputy Managing Director (DMD) of Premier Bank PLC Abdul Quaium Chowdhury said since August 2024, remittances have consistently increased, providing the interim government a respite amid the rapid depletion of foreign exchange reserves. This has evolved as a critical economic relief for a nation that is currently suffering from macroeconomic strains, he added.
