Remittance inflows top $3b for sixth month

Bangladesh received $3.42 billion in remittances in May this year as migrant workers and Bangladeshis living abroad sent more money home ahead of Eid-ul-Azha.

Last month, remittance inflow was 15.34 percent higher year-on-year than the $2.96 billion recorded in May last year, according to data from the Bangladesh Bank (BB).

May marked the sixth consecutive month in which remittance inflows exceeded $3 billion, boosting overall remittances by 19 percent during the July-May period of fiscal year 2025-26. A total of $32.75 billion in remittances entered the country during the period, up from $27.5 billion in the same period a year earlier.

“We have seen that remittance inflows usually grow during festivals. The surge in May is linked to Eid,” said Mati Ul Hasan, managing director of Mercantile Bank PLC.

Data from the Bureau of Manpower, Employment and Training (BMET) showed that more than 46 lakh people left the country for employment, mainly in the Middle East, between FY21 and FY25. During the July-March period of this fiscal year, the outflow of migrant workers grew 5 percent year-on-year to more than 8 lakh from a year earlier.

Hasan said the trend of increased remittance inflows is likely to continue.

“Remittance inflow through formal channels has increased,” he said.

The remittance boost has provided significant support to Bangladesh at a time when the conflict in the Middle East has affected economies through higher energy prices and disruptions to the trade and supply chains of major commodities, including fertiliser, through the Strait of Hormuz, a key maritime route.

Bangladesh, which meets 95 percent of its energy needs through imports, faces higher prices for oil, gas and fertiliser amid the conflict, raising concerns about increased pressure on the balance of payments, a summary of a country’s transactions with the rest of the world.

The buoyancy in remittances, one of the largest sources of foreign exchange for the South Asian country, has provided respite to policymakers as overall foreign exchange reserves increased.

On May 24, foreign exchange reserves stood at $29.89 billion, up from $20.47 billion a year ago, according to BB data.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank PLC, said apart from the Eid festival, uncertainty arising from the war in the Middle East could be another reason for the increased remittance flow.

“We have seen that many people sent money home during the Iraq war,” he said.

“So, a lot will depend on the course of the war,” he said. “But there might be demand for reconstruction work in the Middle East after the war. This might create demand for workers.”