Bangladesh’s foreign exchange reserves have been on the rise, thanks to a significant boost in remittances from expatriates. Between July and August, the inflow of remittances surged, leading to an improvement in the country’s reserves.
According to reports, under the IMF’s BPM6 accounting standards, the reserves stood at $19.56 billion as of September 25. Meanwhile, the Bangladesh Bank’s calculations placed the reserves at $24.67 billion.
For context, as of September 18, the gross reserves were recorded at $24.52 billion, while under the BPM6 standard, it was $19.38 billion. This marks a slight increase in reserves during this period.
Bangladesh Bank spokesperson Husne Ara Shikha commented on this development, stating that the rise in remittances has directly contributed to the boost in foreign exchange reserves. The inflow of remittances saw a steady increase from July to August. As the financial crisis begins to subside, banks have resumed buying and selling dollars independently.
Shikha further explained that the growing remittances have helped stabilize the foreign exchange reserves. Compared to the previous fiscal year, remittance inflows have seen a 60% increase this year. When comparing July to August, the growth rate jumps to nearly 90%.
Bank officials from Bangladesh Bank have reported that since the beginning of September, remittance inflows have maintained a strong pace. If this trend continues, the country is expected to receive $2.5 billion in remittances by the end of the month. Increased awareness and incentives to send remittances through official channels, coupled with the rising exchange rate for legal transfers, have contributed to a decline in the use of informal remittance networks, like hundi, further boosting legal inflows.
This increase in remittances and subsequent rise in foreign exchange reserves is a promising sign for the Bangladeshi economy, helping to offset the economic pressure the country has faced in recent years.
