DHAKA, Oct 30, 2025 (BSS) – Bangladesh’s economy is showing signs of steady recovery and growing confidence, marked by a significant rebound in foreign exchange reserves and an unprecedented surge in remittance inflows.
 
This consistent improvement suggests improved external sector stability, easing pressure on the balance of payments, and effectiveness of central bank policies aimed at maintaining exchange rate stability.
 
Foreign exchange reserves, according to Bangladesh Bank data released Wednesday, currently stand at US$ 32.15 billion.
 
However, when calculated using the International Monetary Fund (IMF) methodology under the Balance of Payments and International lnvestment Position Manual (BPM6), the reserves total 27.35 billion.
 
Based on gross reserves, this current figure translates to an import cover of about 5.5 months, or slightly under 5 months using the IMF BPM6 estimate.

While the situation is not deemed "terribly comfortable" (as the ideal coverage would encompass at least six months of imports), it is still considered comfortable.
 
A critical factor driving this economic relief is an unprecedented surge in remittance inflow, which began after the fall of the Awami League regime on August 5, 2024. This influx offers a vital "glimmer of hope" for the nation's economic resilience amidst global uncertainties.
 
The inflow hit a record-breaking figure of over $30 billion in the fiscal year 2024-25 (FY25), significantly exceeding the previous record of $24.77 billion set in FY 2020-21. 

This momentum has continued into FY 2025-26, with the first three months (July to September) registering $7.59 billion, which is 16.23 percent higher than the corresponding period in the previous fiscal year.
 
Economists, experts, and the business community have observed that this remarkable remittance boom is a crucial driver in stabilizing the Bangladeshi economy.
 
These funds have not only bolstered foreign exchange reserves but have also helped stabilize the exchange rate of the Bangladeshi taka, alleviating pressure on the national currency.
 
At a recent press conference, Deputy Director of the IMF's Asia and Pacific Department, Thomas Helbling, welcomed the increase in foreign exchange reserves accumulated by the Bangladesh Bank.
 
He stated that "The accumulation of reserves is considered a central objective of the IMF-supported programme," particularly since the country continues to face balance of payments pressures.
 
Dr. Zaidi Sattar, Chairman of the Policy Research Institute (PRI) of Bangladesh, stated that Bangladesh’s macroeconomic stability has been restored, albeit modestly, and external indicators like the balance of payments and foreign exchange reserves remain in a comfortable position.
 
He credited the economy's current stability to the adoption of a flexible exchange rate system.
 
Renowned economist Dr. Zahid Hussain agreed that the remittance surge played a crucial role in replenishing reserves, noting that issues faced during the dollar crisis—such as difficulty opening letters of credit (LC) for banks—are now gradually becoming normal
 
Bankers and officials attributed the rise in formal remittance channels to both government policies and market stability. The government is providing a 2.5 percent cash incentive for remittances sent through formal channels to encourage their use and maximize national benefit.
 
Furthermore, the prevailing stable exchange rate has played a key role in diverting funds away from illegal methods like hundi.
 
The rate differential between banks and the kerb market is currently very small. According to market players, remitters receive a maximum exchange rate of around Taka 122.50 per dollar from the banking system, compared to Taka 123 per dollar in the kerb market.
 
Mohammed Shahid Ullah, DMD of the Dutch-Bangla Bank Limited, confirmed that demands for hundi and hawala—illegal cross-border money transfer channels—have declined following a crackdown on operators after the political changeover, diverting more remittances through formal banking channels.
 
He added that the positive effects of the remittance boom are highly visible across Bangladesh, particularly in rural communities that rely heavily on money sent from relatives working abroad.
 
Deputy Managing Director (DMD) of the Premier Bank PLC, Abdul Quaium Chowdhury, noted that remittances have consistently increased since August 2024, providing the interim government with a respite following the rapid depletion of foreign exchange reserves.
 
 This has evolved into critical economic relief for a nation suffering from macroeconomic strains, he added.