The dollar holdings of Bangladesh’s commercial banks declined in August despite a rise in remittance inflows and export earnings, as the central bank’s large-scale dollar purchases and increased import payments drained banks’ foreign currency balances.
According to the latest Bangladesh Bank data, commercial banks’ gross foreign currency balance stood at $4.36 billion in August 2025, down from $5.27 billion in the same month last year.
In June this year, banks held $4.27 billion.
Bankers explained that banks’ dollar liquidity had improved over the past year, supported by a sharp rise in both remittance inflows and export receipts.
However, the surplus dollars created downward pressure on the exchange rate, pushing the market rate of the dollar down to Tk 119 in June.
To prevent further depreciation and ensure stability, Bangladesh Bank intervened by buying nearly $2 billion from commercial banks since July.
This helped stabilise the exchange rate at Tk 123 per dollar, a rate intended to encourage remittance inflows through formal banking channels and support export competitiveness.
The inflows of remittances have been particularly strong.
From July 2024 to June 2025, migrant workers sent home a record $30.32 billion, marking a 26.83 per cent rise from $23.91 billion in the previous fiscal year.
Since August 2024, monthly remittances have consistently remained above $2 billion.
Export earnings also rose, reaching $48.3 billion in FY25, up 8.6 percent from $44.47 billion in FY24, according to Export Promotion Bureau data.
Meanwhile, letters of credit (LCs) for imports increased moderately, totalling $69 billion in FY25 compared to $66.72 billion a year earlier.
Bankers further noted that reduced money laundering through informal hundi channels has contributed to higher dollar inflows into the formal system.
The narrowing gap between the official interbank exchange rate and the unofficial hundi rate encouraged migrants to send money through banks.
In previous years, many migrants opted for informal channels due to higher returns.
The official interbank rate has steadily climbed, reaching Tk 123 per US dollar, up from Tk 110 in December 2023, Tk 106 in June 2023, and Tk 93.45 in June 2022.
To preserve reserves, Bangladesh Bank shifted its policy in recent months.
Instead of selling dollars to commercial banks, as it did during earlier phases of the crisis, the central bank is now buying dollars to replenish its own holdings.
As of September 25, the country’s gross foreign exchange reserves increased to around $26.4 billion, calculated under the IMF’s Balance of Payments and International Investment Position Manual (BPM6).
