REJAUL KARIM BYRON and AHSAN HABIB

Bangladesh received a record $3.29 billion in remittances in March -- the highest monthly figure to date -- marking a 65 percent year-on-year surge.

The rise is largely attributed to stronger inflows through formal channels, an uptick in overseas employment and expatriates sending more money home for Eid-related expenses.

This influx has offered a much-anticipated tonic to an economy under strain, with foreign exchange reserves under pressure and the interim government navigating macroeconomic challenges.

Remittance earnings have been climbing steadily since August last year, providing some much-needed breathing space.

According to the Bangladesh Bank, the previous monthly record was set in December 2024, when remittances reached $2.64 billion. The latest figure crossed that, setting a new benchmark for Bangladesh.

Between July and March of the current fiscal year (FY) 2024-25, total remittances amounted to $21.77 billion -- up from $16.69 billion during the same period the previous year.

Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said a shift towards formal remittance channels has most likely caused the spike.

The change, he said, followed a decline in demand for informal hundi networks after politically linked money launderers went into hiding with the political changeover in August last year.

Quoting the White Paper on the State of the Bangladesh Economy, the economist said illicit outflows -- historically equivalent to 35-75 percent of official remittance flows -- were estimated at around $16 billion annually.

“As hundi-driven outflows declined, formal channels absorbed significant volumes,” he added.

While the US dollar’s depreciation played a role, Hussain said its impact was marginal.

Remittances are usually sent in dollars, so when currencies like the Malaysian ringgit gain strength, the dollar value of remittances increases. However, this factor alone doesn’t account for the recent surge, he said.

“Religious occasions such as Ramadan and Eid, or the shifting timing of Ramadan, also fail to fully explain the increase, as historical patterns have shown mixed trends,” he added.

Following the Covid-19 pandemic, the number of Bangladeshi migrants sending money home rose by 2.9 million. Although political turmoil disrupted flows temporarily, formal channels capitalised on the larger migrant base and the reduced reliance on hundi networks.

Their speed, security, and expanding range of services also contributed to their growing popularity among expatriates, according to Hussain.

Figures from the Bureau of Manpower, Employment and Training (BMET) show that manpower exports crossed 1 million in 2017 before falling to between 200,000 and 700,000 annually over the next four years.

The number rebounded in 2022, crossing 1.1 million, and surged further in 2023 and 2024, reaching 2.3 million.

Although manpower exports rose, remittance growth remained subdued during