The Number That Keeps Getting Bigger

Fiscal year 2024–25 was already a milestone: Bangladesh received $30.04 billion in remittances, the first time the figure had ever crossed the $30 billion threshold, a 25.5% increase over the year before. Then FY26 started — and the records kept falling.

July 2025: $2.47 billion. August: $2.42 billion. September: $2.68 billion. October: $2.56 billion. November: $2.88 billion. December: $3.22 billion — the second highest single month in history. January 2026: $3.17 billion — the third highest. By February 25, cumulative FY26 remittances stood at $22.25 billion, compared to $18.24 billion in the same period last year. That's 21.8% growth on top of an already-record base.

If the trajectory holds through June 2026, Bangladesh is on course for a full-year remittance figure somewhere between $35 billion and $37 billion — nearly matching the country's entire garment export earnings in a single line item. For context: in FY1974–75, Bangladesh received $11.8 million in remittances. The journey from $11.8 million to $30+ billion in fifty years is one of the most remarkable economic transformations in modern development history.

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13 Million People Working So Bangladesh Can Function

The numbers are generated by people. Over 13 million Bangladeshis live and work abroad — in the Gulf states, Malaysia, Singapore, the United Kingdom, the United States, Italy, and dozens of other countries. Saudi Arabia remains the single largest source of remittances, followed by the UAE, Qatar, Oman, Bahrain, Kuwait, and Malaysia in Asia. The US and UK account for a smaller but growing share, driven by second-generation diaspora with higher incomes.

The migration profile is predominantly low- to semi-skilled: construction workers in Riyadh and Dubai, domestic workers in Oman and Kuwait, factory workers in Malaysia, garment workers in Jordan. A record 1.3 million Bangladeshis left for work abroad in 2023 alone. Many leave without full documentation of their employment terms, paying substantial recruitment fees that can take years to recover through remittances home.

What changes year to year is not the number of people abroad — that figure moves slowly — but how much they send back and through which channels. The 2024–2026 surge is primarily a story about channel shift, not migration volume growth.

Why the Surge: Four Converging Reasons

Bangladesh Bank Executive Director Arif Hossain Khan has cited four structural drivers behind the FY26 remittance growth, and the evidence broadly supports all four.

First, restored confidence in formal banking channels. The political transition of August 2024 — when Sheikh Hasina's government fell and Muhammad Yunus's interim administration took power — created an unusual dynamic. Expatriate Bangladeshis, many of whom had been sending money through informal hundi networks partly out of distrust of the banking system, began shifting back to official channels. Hundi networks offered faster transfers and sometimes better effective rates, but they moved money outside the foreign exchange system and were untraceable. The new government's stated commitment to financial transparency — combined with Bangladesh Bank's active crackdown on hundi operators — made formal channels relatively more attractive.

Second, a more market-oriented exchange rate. For years, Bangladesh maintained an artificially controlled taka exchange rate that created a gap between the official bank rate and the curb market rate. Remitters using formal channels effectively received less for their dollars than those using hundi. Bangladesh Bank's decision to move toward a more market-aligned rate — eliminating most of that gap — directly incentivized formal channel use. When the difference between sending money through a bank and through a hundi operator narrows to near zero, the bank wins on trust and convenience.

Third, a 2.5% government cash incentive on formal remittances. Bangladesh Bank continued the policy of providing a Tk2.50 incentive for every $100 sent through official channels. While the amount is modest, it functions as a visible signal that the government values formal remittances and adds a small but real financial benefit for regular senders.

Fourth, Gulf labor market expansion. Saudi Arabia's Vision 2030 infrastructure program, UAE's post-Expo construction boom, and Qatar's post-World Cup infrastructure maintenance have kept demand for South Asian construction and service labor elevated. The Gulf Cooperation Council collectively remains the destination of choice for Bangladeshi migrant workers, and elevated project activity has kept wages and employment levels relatively stable.

What $22 Billion Actually Does

The macroeconomic impact is substantial and well-documented. Remittances now account for 6.57% of Bangladesh's GDP and finance approximately 47% of the country's import payments. As of February 17, 2026, Bangladesh's gross foreign exchange reserves stood at $34.54 billion — a recovery from the $20 billion range that created panic in 2022–23. A significant portion of that reserve build came directly from Bangladesh Bank purchasing dollars from commercial banks, which in turn accumulated those dollars from remittance inflows. The central bank bought $5.47 billion from commercial banks in the first eight months of FY26 alone.

The taka exchange rate — which had fallen to Tk120–125 per dollar during the 2022–23 crisis — has stabilized at around Tk122.30 as of late February 2026. CPD Distinguished Fellow Mustafizur Rahman noted that the remittance surge is directly offsetting the slight contraction in garment export earnings seen in December 2025, providing macroeconomic cushion during a period of global trade uncertainty.

At the household level, the story is even more direct. A survey by the Bangladesh Bureau of Statistics found that 32.81% of remittances go toward food expenditure, 32.82% toward other daily consumption, 18.84% toward land purchases and durable goods, 13.74% toward savings, and 33.45% toward investment. The overlap in those figures reflects dual-use spending — a single remittance transfer might pay for groceries, school fees, and a contribution to a savings account simultaneously.

In practical terms: a garment worker in Riyadh sending Tk25,000 home each month to Gazipur is paying his family's rent, his sister's tutoring fees, and slowly building equity toward a plot of land. Multiply that transaction by 13 million workers and you have an invisible infrastructure of household-level welfare spending that no government budget can replicate.

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The Hundi Problem — and Why It's Shrinking

No discussion of Bangladesh remittances is complete without addressing hundi — the informal hawala-based transfer network that has operated parallel to formal banking for decades. Estimates of hundi's share of total remittance flows vary widely, but economists generally believe it accounted for 30–50% of actual remittance volume during years when the official figures looked relatively flat despite rising migration numbers.

Hundi works because it is fast (same-day delivery in many cases), cheap (often zero visible fees), and private. A worker in Dubai hands cash to a hundi broker; the broker's counterpart in Dhaka's Sadarghat or Sylhet's bus station hands equivalent taka to the recipient's family — no bank account required, no documentation, no traceable transaction. For migrant workers in irregular employment situations, or for families who distrust banks, hundi's advantages were real.

The crackdown that began under the interim government has reduced hundi's relative advantage in two ways. First, Bangladesh Bank has tightened enforcement against unlicensed money transfer operators, making the hundi networks more expensive to operate and more legally risky for brokers. Second, the exchange rate convergence between official and curb market rates removed the primary financial incentive for using hundi — when formal channels offer rates within 1–2% of the street rate, the risk-adjusted calculation for most migrant workers favors formal channels.

The evidence is visible in the data: the surge in formal remittances from August 2024 onward coincides precisely with the political transition and the subsequent policy shifts. Mutual Trust Bank CEO Syed Mahbubur Rahman put it directly: confidence in the banking system has been restored, and expatriates are remitting through formal channels as a result.

The Structural Weakness Beneath the Record Numbers

Bangladesh's remittance story has a shadow side that every record headline obscures. East Asia Forum economists have called the country's dependence on expatriate earnings a potential "remittance trap" — a reference to how Nepal's economy became so dependent on remittances (28% of GDP) that it lost domestic labor market depth, diversification incentives, and investment-driven growth.

Bangladesh is not Nepal — remittances represent roughly 6.57% of a larger, more diversified economy dominated by garment exports. But the structural risks are real. Most remittance income flows into household consumption and real estate rather than productive investment. Without policy frameworks that channel remittances into education, SMEs, or capital markets, the developmental multiplier remains lower than it could be. A worker buying land in Munshiganj is securing his family's future, but that land purchase does not create jobs or build export capacity.

The Bangladesh government has discussed diaspora bonds and remittance-linked savings products with attractive interest rates and sovereign guarantees — instruments that would transform remitters from consumers into investors. Implementation has been slow. The 2.5% cash incentive, while useful for channel-switching, does not address the investment gap.

There is also a skill structure problem. Bangladesh's migration profile is concentrated in low- to semi-skilled work. Gulf construction and domestic service jobs are vulnerable to automation, policy changes in destination countries, and economic cycles. Saudi Arabia's Vision 2030 will not run forever. Malaysia periodically changes its migrant worker policies. When the Gulf labor market contracts — as it eventually will — remittance volumes will feel it. The government has talked about sending more skilled workers to Japan, South Korea, and Europe, where higher wages generate larger remittances. Progress has been slow relative to the scale of the opportunity.

February 2026: What the Numbers Mean Right Now

For the BNP government that took office after the February 12 election, the remittance surge is both an asset and a warning. The asset: $22.25 billion in eight months has rebuilt foreign exchange reserves to $34.54 billion, stabilized the taka, offset export weakness, and provided the fiscal space to negotiate with the IMF from a position of relative strength. The government no longer faces the currency crisis that consumed so much of the Yunus interim period.

The warning: this windfall is partly structural (more migrants sending more money through formal channels) and partly cyclical (the Gulf labor market is healthy right now, the hundi crackdown is recent and may erode, migrant confidence in formal channels is restored but fragile). A new Bangladesh Bank governor — Mostaqur Rahman, appointed February 25 with no central banking experience — must sustain the policy environment that produced this result. The exchange rate management, the hundi enforcement, the 2.5% incentive scheme — these are not self-sustaining. They require active stewardship.

For the 13 million Bangladeshis working abroad and the families waiting for their transfers in Chittagong, Sylhet, Barishal, and Rangpur, none of this institutional complexity matters. What matters is whether the money arrives safely, at a fair rate, without excessive fees, before the rent is due. On that measure, 2026 is working. The question is whether the institutions managing that flow are stable enough to keep it working.

win-tk.org is a WinTK publication. For independent coverage of Bangladesh economy, politics, and remittance policy, visit win-tk.org. Contact: editor@win-tk.org