Remittances Strengthen Reserves in Landmark Year

Bangladesh’s economy has received a renewed boost from expatriate remittances, with December emerging as a particularly strong month and the full year delivering a volume of inflows that closely mirrors the nation’s total foreign exchange reserves. The latest data from Bangladesh Bank underline once again the central role of overseas workers’ earnings in sustaining macroeconomic stability amid global and domestic uncertainties.

According to the central bank, remittance inflows reached USD 3.22 billion in December alone, making it the second-highest monthly figure in the country’s history. The only higher monthly inflow was recorded in March of the previous year, when remittances peaked at USD 3.29 billion ahead of Eid-ul-Fitr. By comparison, November’s inflows stood at approximately USD 2.89 billion, meaning December registered an increase of around USD 330 million within a single month.

Sector analysts attribute this sharp rise to several converging factors. One key driver has been heightened financial caution among expatriates ahead of the forthcoming national election, prompting many to transfer larger sums home. At the same time, the relative stability of the exchange rate and improved confidence in the formal banking system have encouraged remittances through legal channels rather than informal networks.

For the entire calendar year 2025, Bangladesh received a total of USD 32.82 billion in remittances. Strikingly, this amount is almost equivalent to the country’s overall foreign exchange reserves, a comparison that highlights the strategic importance of remittance inflows for balance-of-payments stability. The steady flow of dollars has prevented any acute shortage in the banking sector and has helped keep the exchange rate broadly stable.

Throughout the year, Bangladesh Bank actively intervened in the foreign exchange market, purchasing dollars from commercial banks as needed to maintain orderly conditions. As a result, by the end of 2025, gross foreign exchange reserves rose to about USD 33 billion, the highest level in the past three years. This marks a significant recovery from August 2024, when reserves had fallen to roughly USD 26 billion amid political upheaval, triggering severe dollar shortages and pushing the exchange rate as high as BDT 128 per dollar. With conditions improving, the rate has since eased to around BDT 122.

The post-August 2024 period has seen a sustained improvement in remittance trends. The decline of illegal hundi operations, tighter controls on capital flight, and a more predictable exchange rate within the banking system have collectively incentivised expatriates to remit funds through official channels.

As of the latest update, Bangladesh Bank’s reserves stood at USD 33.18 billion, or USD 28.51 billion under the IMF’s BPM-6 methodology. On the same day, the central bank purchased USD 89 million from seven banks via auction at a rate of BDT 122.30 per dollar. Notably, in just the first six months of the 2025–26 fiscal year, total dollar purchases have reached USD 3.13 billion, with more than USD 1 billion acquired in December alone.

Recent Remittance and Reserve Snapshot

Overall, the sustained rise in remittances is reinforcing Bangladesh’s foreign currency position and restoring confidence across the economy, offering renewed hope for financial stability in the period ahead.