Surge in remittances stabilises reserves

Business Eye Report

Bangladesh Bank has announced a notable increase in the country's foreign exchange reserves, driven by a substantial rise in remittance inflows. Husne Ara Shikha, the Executive Director and newly appointed spokesperson of the central bank, revealed that the surge in remittances from expatriates has been a key factor in stabilizing and enhancing the reserves.
In a statement made on Tuesday, Shikha emphasized that the significant rise in remittance inflows has effectively halted the previous decline in reserves. The central bank now anticipates that the positive trend in expatriate income will continue to bolster the country's forex reserves.
"Expatriates are sending huge amount of remittances. This is the major reason for the increase in reserves. This has stopped the decline of reserves," said HusneAraShikha
The Bangladesh Bank has reported a rise in the country's foreign exchange reserves, now at USD 2.4 billion, with the International Monetary Fund's BPM-6 system indicating reserves approaching $20 billion. This increase is attributed largely to a surge in remittance inflows from expatriates.
HusneAraShikha, Executive Director and new spokesperson for the central bank, announced that banks are now authorized to independently buy and sell US dollars, signaling a subsiding of the previous forex crisis.
Currently, the dollar is trading between Tk 118 and Tk 120, with the discrepancy between the banking channel rate and the kerb market rate narrowed to less than 1 percent. Shikha noted that the exchange rate is now determined by market forces, and with active interbank transactions, the forex market is expected to remain stable moving forward.
Remittances sent by Bangladeshis living abroad have soared nearly 39 percent year-on-year, reaching $2.2 billion in August. This substantial increase is expected to alleviate some of the pressure on the country's foreign exchange reserves.
The significant rise in remittance inflows comes as a welcomed boost for Bangladesh's financial stability, helping to stabilize and enhance the nation's forex reserves. This development underscores the crucial role of remittances in supporting Bangladesh's financial stability and suggests a more secure outlook for the nation's foreign exchange position.