Experts for balanced export import management amid dollar market pressure

Despite record remittance inflows pressure on Bangladesh’s foreign exchange market remains significant with rising import expenditure, higher external debt repayments and weaker net inflows from assistance contributing to sustained demand for US dollars.

Economists and bankers say Bangladesh needs coordination between foreign currency earnings and external payments alongside improved dollar management, stronger exports and measures to discourage informal money transfers through hundi.

They also stressed the need for transparency in assessing dollar demand across different sectors ensuring adequate foreign currency supplies to commercial banks and making formal remittance channels more attractive.

Bangladesh received a record $35.59 billion in remittances in the 2025–26 year registering year on year growth of 17.3 percent according to Bangladesh Bank data.

However import payments increased to $71.14 billion, around $6.8 billion more than in the previous fiscal year.

Export earnings stood at $43.85 billion while the merchandise trade deficit widened to around $27.28 billion reflecting the growing gap between export receipts and import expenditure.

Experts said rising remittances alone could not guarantee stability in the dollar market because foreign currency demand also depends on import payments, external debt servicing, investment and other international financial transactions.

Mahdi Amin, adviser to the Prime Minister and spokesperson for the Prime Minister’s Office said in a recent programme that Bangladesh’s foreign exchange reserves had increased to $36.58 billion while Bangladesh received a record $3.75 billion in remittances in March this year.

However he noted that rising reserves and the availability of dollars at banks were not the same thing.

While reserves represent Bangladesh’s foreign asset position banks’ dollar liquidity depends on export earnings, remittance settlements, interbank transactions and the timing of import payments and external debt repayments.

Amin stressed the importance of increasing remittance inflows by expanding employment opportunities for skilled workers particularly in Europe and the United States rather than relying heavily on the Middle East.

He said Italy had taken initiatives to recruit Bangladeshi workers legally after providing them with technical training.

The Italian government planned to organise a programme the following month to facilitate training and employment opportunities.

The Bangladesh government was also working to expand migration simplify visa procedures for Bangladeshi students travelling to Italy and facilitate the overseas deployment of skilled workers he added.

Sakif Shamim, chairman of the Centre for Strategic and Economic Research (CSER) and managing director of Labaid Hospital Group said the continued pressure on the dollar market despite rising remittances could be understood by examining Bangladesh’s external transactions.

According to his analysis remittance earnings increased by $5.25 billion in FY2025–26 while import expenditure rose by around $6.8 billion.

The additional increase in import payments therefore exceeded remittance growth by $1.55 billion.

However the difference does not represent the foreign exchange deficit attributable to imports as remittances do not exclusively finance import payments and not all import liabilities are settled in cash dollars during the same period.

Letters of credit (LCs) trade credit and the timing of transactions also influence demand.

Shamim’s analysis further showed that foreign assistance disbursements declined to $8.07 billion in the fiscal year from $8.57 billion previously.

Meanwhile repayments of principal and interest on debt increased to around $4.49 billion from $4.09 billion.

Consequently net inflows from assistance after debt repayments fell to $3.58 billion from $4.48 billion, a decline of approximately $900 million.

These figures indicate that higher remittance earnings were partly offset by increased import expenditure and weaker net inflows from assistance while limited export growth provided little additional support.

Bangladesh received $8.59 billion in remittances during July–September of the current 2026–27 fiscal year.

Monthly inflows stood at around $2.86 billion in July $2.97 billion in August and $2.77 billion in September.

Bangladesh Bank reported foreign exchange reserves of $36.39 billion on October 17 while reserves calculated under the International Monetary Fund’s BPM6 methodology stood at $31.58 billion.

Although the improvement, in reserves has strengthened Bangladesh’s position it does not guarantee that every commercial bank will have sufficient dollars available whenever import payments fall due.

Masrur Arefin, managing director of City Bank and chairman of the Association of Bankers, Bangladesh (ABB) identified inflation, energy costs and future market conditions as factors influencing the foreign exchange market.

He said in an event recently that if inflation stays above 8.5 percent it would affect parts of the economy and also could change the exchange rate.. He pointed out that banks have enough dollars so there is no reason to panic.

His comments show the difference between a lack of foreign currency and the chance that the exchange rate might go up. Short term pressure can come from when import paymentsre made when banks choose to keep foreign currency and from what people expect about future exchange rates even if banks already hold enough dollars.

Experts also pointed out hundi and illegal trade related money flows as worries for the foreign exchange market. When remittances skip banks foreign currency might not reach the country’s banking system through normal routes.

Likewise differences in the declared values of imports and exports can open chances for money transfers but those differences do not automatically prove crime.

In a report released on March 26 2026 Global Financial Integrity estimated that possible illegal money flows linked to differences in Bangladesh’s trade data were $68.3 billion from 2013 to 2022 about $6.83 billion each year. This figure should not be taken as an amount of money laundering because changes in how goods are valued, shipping costs, timing and product categories can also change trade numbers.

Experts suggested making import and export values reliable better teamwork between Bangladesh Bank, the National Board of Revenue the Bangladesh Financial Intelligence Unit and commercial banks and cutting the cost and wait time for sending remittances through official channels.

They also urged steadier exchange rate management more diverse export markets and more chances for skilled workers abroad.

Policymakers they said, should often check debt repayment plans aid money given out and possible shifts in import spending and remittance income to foresee pressure on reserves and bank liquidity.

A risk study using FY2025–26 numbers shows that a 10 percent drop in remittances would cut inflows by about $3.56 billion. A 5 percent rise in import spending would need another $3.56 billion in currency.

If both changes happened at the time total pressure could hit about $7.12 billion assuming no other changes. These numbers are examples, not predictions.

Bangladesh’s record remittance earnings are still a success.. Experts said keeping foreign exchange stable needs a better balance, between money coming in and money going out better export results, debt that can be handled and a faster formal banking system.

They said the main goal should be not to grow foreign exchange reserves but also to make sure a steady and reliable supply of dollars stays in the economy.