The volume of foreign currency transactions made through cards surpassed Tk 800 crore in December 2024, the first time in a year, as increased outbound travel during the holiday season boosted spending.
Bangladesh Bank data showed that card-based foreign currency transactions surged to Tk 834 crore in December, up from Tk 672.34 crore in November and Tk 727 crore in October.
This spike aligns with the annual trend of increased foreign currency spending in December, as many Bangladeshis travel abroad for vacations.
The highest-ever recorded foreign currency transaction volume through cards was Tk 929 crore in December 2023, while in December 2022, the figure first crossed the Tk 640 crore mark.
Bankers attributed the rise in foreign currency transactions to greater accessibility and convenience for travelers.
Over the years, banks have made it easier for customers to use foreign currency through debit and credit cards, reducing the need to carry large sums of cash.
Travellers use their foreign currency in their cards mostly for payment of plane fares, travel costs, hotel booking and to bear shopping expenses, among others, they said.
Under Bangladesh Bank regulations, each cardholder is entitled to spend up to $12,000 annually in foreign transactions.
The volume of such transactions depends on both the availability of US dollars on the financial market and the number of outbound travelers.
Recent increases in remittance inflows and export earnings have helped bolster banks鈥� foreign currency reserves, partially supporting card-based transactions.
However, despite a moderate increase in transaction volumes, the total expenditure in terms of local currency has risen sharply due to the continued depreciation of the taka against the US dollar.
The exchange rate has climbed steadily in recent years, reaching Tk 122 per dollar in December 2024, compared with that of Tk 110 in December 2023, Tk 104 in December 2022 and Tk 85.80 in December 2021.
This depreciation has made foreign currency transactions more expensive in terms of taka, affecting travelers and businesses relying on international payments.
Bankers also noted that banks had been adjusting foreign currency rates in card-linked accounts, which could result in travelers obtaining dollars at higher rates.
Since May 2022, the use of cards for foreign currency transactions has risen consistently, as travelers turned to card-based spending due to a dollar shortage on the local financial market.
In May 2022, the transaction volume through cards was Tk 358 crore and the trend has continued going upwards ever since.