Remittance inflow to Bangladesh reached a record high of $13.77 billion in the first half of fiscal year 2024-25, with December alone contributing record $2.63 billion, according to Bangladesh Bank data.
It is a significant increase compared with $10.9 billion during the same period last fiscal year.
Bankers attribute the surge in remittance inflow to the rise in the dollar exchange rate and a reduction in money laundering through illegal channels such as hundi.
During the first half of the fiscal year 2024-25, remittance inflow stayed above $2 billion for the fifth consecutive month till December.
Experts attributed this surge to an increased use of official channels, especially state-owned banks, by expatriates in sending money to the country after a major political shift in Bangladesh on August 5.
The new government鈥檚 efforts to stabilise the financial sector have fostered the expatriates鈥� trust in state-run institutions, they said.
Remittance inflow reached $2.63 billion in December, $2.19 billion in November, $2.39 billion in October, $2.4 billion in September, $2.22 billion in August and $1.91 billion in July.
In January to December, 2024, remittance inflow hit $27 billion, which was 23 per cent higher than the previous year.
The high remittance inflows have helped the central bank repay significant foreign overdue payments by the end of December.
聽Despite these repayments, the country鈥檚 foreign currency reserve, according to the International Monetary Fund guidelines, increased to $21.33 billion on December 29.
In December, five state-owned banks accounted for an impressive 31 per cent of the total remittances, processing $832 million.
Islami Bank Bangladesh, however, led with remittance receipts of $360 million in November, followed by Agrani Bank $264 million, Sonali Bank $211 million, BRAC Bank with $193 million, Trust Bank $184 million, Janata Bank with $147 million, National Bank $119 million and Bangladesh Krishi Bank with $112 million.
Some banks purchased dollars at the rate of Tk 126-128 in December, although the rate came down to Tk 123 each by the end of December.
In addition to the rate, the remitters enjoyed government鈥檚 incentive.
The rate was Tk 120 each on December 10, which suddenly surged to the peak due to immense pressure on repaying foreign loans. BB also found some malpractices and price manipulation by a number of banks.
In order to stabilise the dollar rate and prevent malfunction, BB introduced managed floating rate system for determining actual dollar rate.
The dollar rate was Tk 110 in December 2023, Tk 99 in December 2022 and Tk 84.8 in July 2021.
The high dollar rates attracted expatriates to use formal channels for money transfers, avoiding illegal channels like hundi, bankers said.
The remittance inflow reached $23.9 billion in FY24, up from $21.6 billion in FY23.