Remittances surge 10.8% to $2.97 billion in August

Remittance inflows increased 10.82% year-on-year to $2.97 billion in August, supported by continued preference among expatriate Bangladeshis for formal banking channels, according to Bangladesh Bank data released Tuesday.

The August inflow was nearly $290 million higher than the $2.68 billion received during the same month last year.

Despite the annual growth, monthly remittances remained below the $3 billion threshold for the third consecutive month, after reaching $2.82 billion in June and $2.86 billion in July.

Nevertheless, August’s inflow was significantly higher than the $2.42 billion recorded in August 2025.

Remittances had surged to $3.17 billion in January, $3.02 billion in February and a record $3.75 billion in March. In April, inflows stood at $3.13 billion before rising further to $3.44 billion in May. They subsequently eased to $2.82 billion in June and edged up to $2.86 billion in July.

The figures suggest that while remittance flows have moderated from the exceptionally high levels recorded around Eid-ul-Fitr and Eid-ul-Azha, they continue to remain considerably stronger than during the corresponding period last year.

Remittances typically increase ahead of Eid as expatriate Bangladeshis send additional funds to their families to cover festival-related expenses. Flows generally ease after the festivals.

August is also not traditionally a peak month for remittances, as monthly inflows vary depending on migrants’ household commitments, religious occasions and employment cycles in destination countries.

“The continued inflow below the $3 billion mark is notable because the Middle East remains the main source of Bangladesh’s remittance earnings, while the region has been facing significant geopolitical uncertainty,” an expert said.

A senior banker attributed part of the sustained year-on-year growth to the growing use of formal banking channels.

Bangladesh Bank and banking-sector officials have linked the increase in formal remittance flows to measures aimed at curbing the informal hundi system and making authorised channels more attractive to migrant workers.

The government’s 2.5% cash incentive on remittances has also encouraged expatriates to send money through banks and other authorised channels. The incentive increases the amount received by families in taka, providing an added motivation for migrant workers, particularly lower-income earners, to use formal channels.

However, hundi continues to play a role in the remittance market. While a growing portion of migrant earnings is now being transferred through formal channels, some funds continue to move through informal networks and are therefore not reflected in Bangladesh Bank’s official statistics.

The exchange rate has also influenced remittance flows.

The depreciation of the taka and the shift towards a more market-oriented exchange-rate regime have narrowed the gap between official banking rates and informal market rates, reducing the incentive to use hundi.

However, renewed volatility in the foreign-exchange market in recent months, including fluctuations in the dollar-taka exchange rate, has created uncertainty for both remitters and banks.