[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Forex reserves dip below $30b after ACU payment

The country's gross foreign- exchange (forex) reserves have fallen below the $30-billion mark following the payment of $2.02 billion in import bills through the Asian Clearing Union (ACU), according to Bangladesh Bank (BB). After this significant settlement, Bangladesh's gross forex reserves stood

thefinancialexpress.com.bd

Forex reserves dip below $30b after ACU payment

FE REPORT
Published :
Jul 09, 2025 00:37
Updated :
Jul 09, 2025 00:37

The country's gross foreign- exchange (forex) reserves have fallen below the $30-billion mark following the payment of $2.02 billion in import bills through the Asian Clearing Union (ACU), according to Bangladesh Bank (BB).

After this significant settlement, Bangladesh's gross forex reserves stood at $29.53 billion based on BB's calculation and $24.45 billion as per the International Monetary Fund (IMF) methodology, as of 7 July 2025.

The current members of the ACU include Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka, and the Maldives. However, Sri Lanka withdrew from the union in October 2022 due to its own reserve crisis.

Under the ACU mechanism, member countries settle their import-export payment obligations every two months.​

 

[Saif]

Record remittance inflow boosts forex reserves

Within just eleven months of the interim government, Bangladesh's foreign currency reserves have gone up from less than US$20 billion in 2024 to over $31 billion by June, 2025, indicating that the country is now going well through an economic recovery phase.

en.prothomalo.com

Record remittance inflow boosts forex reserves
BSS Dhaka
Published: 08 Jul 2025, 22: 40

Within just eleven months of the interim government, Bangladesh's foreign currency reserves have gone up from less than US$20 billion in 2024 to over $31 billion by June, 2025, indicating that the country is now going well through an economic recovery phase.

During this period, the record inflow of remittances into the country's national reserves is substantially contributing to the stability of institutions, easing of the liquidity crisis, and to some other activities.

Economists and experts observed that the record inflow of remittances has been an important bellwether of Bangladesh's economic recovery.

According to the Bangladesh Bank (BB) latest data, the country's gross reserves have risen to $31.72 billion by 2 July 2025.

However, as per the International Monetary Fund (IMF) methodology under the Balance of Payments and International Investment Position Manual (BPM6), Bangladesh's net reserves currently stand at $26.67 billion.

The surge came after a significant increase in remittance inflows, which reached $30.33 billion in the outgoing fiscal year 2024-25 (FY25), marking the highest amount ever received in a single fiscal year in the country's history.

This figure reflects a 26.80 percent increase compared to the $23.91 billion received in the previous fiscal year (FY24).

This surpasses the earlier record of $24.77 billion received in FY 2020-21 during the Covid-19 pandemic, when remittances spiked due to restrictions on informal hundi channels and the introduction of incentive bonds.

A record $3.29 billion in remittances came through the banking channel in March 2025, the highest in a single month in the country's history.

In continuation of this, more than $2 billion remittances have arrived in the country each month of the last fiscal year (FY25).

Talking to BSS, a senior official of the central bank said that the reserves are rising due to the declining trend in money laundering, with a good flow of expatriate income and high growth in exports.

"Almost eleven months ago, the Interim Government came to power, promising to bring changes across the board. A number of policy measures have been taken to reform the national economy, organizations, administration, and thus establishing a strong system of fostering public spirit," he said.

He added the dollar exchange rate has remained stable at around Tk 122 for a long time which is also a positive aspect.

"The main reason for the decline in the dollar price is the increase in supply. The supply of dollars is now at its best over the last two years," he noted.

The Bangladesh Bank official said several factors contributed to the sudden surge of remittances in Bangladesh.

"While the government took a range of initiatives to tackle price manipulation under the capital market, defying the norm, surging exports reaching a staggering amount of $48 billion which has also contributed to this rise," he mentioned.

He said the non-residents or the Bangladeshi expatriates also felt motivated to send remittances legally through the banking channel.

Renowned economist Dr Zahid Hussain said the surge in remittances has played a crucial role in replenishing the reserves, providing much-needed relief to the economy.

"Due to the dollar crisis, Bangladesh economy faced a lot of problems. It was difficult to open letter of credit (LC) for banks. Now everything is gradually becoming normal," he added.

After taking office, Dr Zahid, also the former lead economist of the World Bank Dhaka office, mentioned that the interim government started to restore regulations in the banking sector, supported the distressed institutions from falling further and took initiatives to bring back
the laundered money from abroad.

The government has advanced a lot in freeing the banking sector from the clutch of a business conglomerate, he said.

"We're going towards a more or less stable condition, but I won't say the crisis is over," he added.

Deputy Managing Director (DMD) of the Premier Bank PLC Abdul Quaium Chowdhury said since August, 2024, remittances have consistently increased, providing the interim government a respite amid the rapid depletion of foreign exchange reserves.

This has evolved as a critical economic relief for a nation that is currently suffering from macroeconomic strains, he added.​

 

[Saif]

Bangladesh's growth depends on women's economic empowerment

There are three major aspects of women’s empowerment—social, political and economic.

www.thedailystar.net

Bangladesh's growth depends on women's economic empowerment

FILE ILLUSTRATION: ANWAR SOHEL

There are three major aspects of women's empowerment—social, political and economic—and all three are equally important. It is widely recognised that economically empowering women can help achieve developmental goals such as economic growth, increased productivity and the reduction of household poverty. To achieve economic empowerment, women must be given decision-making power and control over financial resources in the form of loans and grants, as well as other factors of production such as land, training, technological support, employment opportunities and market access.

It has been widely demonstrated that women's economic empowerment contributes to GDP growth and a more equitable society. Women's contributions to family income benefit children's health and education, thereby helping to build human capital and facilitate movement out of poverty. In Bangladesh, although significant progress has been made, women still lag behind in most economic indicators such as business skills, digital literacy, employment, earnings, and access to productive assets (land, capital and machinery). In addition, social barriers such as the high rate of early marriage and early pregnancy discourage many young women from seeking training and employment or competing with their male counterparts in business ventures.

According to the Labour Force Survey (LFS) 2022, only 42.5 percent of working-age women in Bangladesh participate in the labour force, compared to 81.3 percent of men. Although women's labour force participation increased from 36.3 percent in the LFS 2017, it remained half that of men in 2022. Around 16.5 percent of adolescent girls aged 15 to 24 years are unemployed—twice the rate experienced by adolescent boys in the same age group. A significant wage gap also exists between male and female workers.

According to World Bank data, about 21 percent of Bangladeshi women are engaged in the fields of science, technology, engineering and mathematics (STEM), compared to 43 percent in India, 41 percent in Sri Lanka, and 37 percent in Indonesia. As per the Global System for Mobile Communications Consumer Survey 2023, a gender gap of 20 percent exists in mobile ownership and a 40 percent gap in mobile internet adoption in Bangladesh—higher than in India and Indonesia. In addition, 68 percent of women in Bangladesh own mobile phones compared to 85 percent of men, and the gender disparity is even more pronounced in smartphone ownership.

Experience from most developed countries shows that with economic development, poverty levels fall and gender inequality is reduced. This typically occurs as women take advantage of a growing economy by engaging in diverse economic activities. Governments increase budget allocations for health and education and introduce various incentives to encourage women's participation in productive sectors. Although a similar trend is observed in Bangladesh, the pace of economic empowerment remains slower than expected due to the factors explained below.

The Bangladesh government allocates a substantial amount of resources for women in the annual budget. According to the Gender Budget Report 2024-2025, the government allocated Tk 271,818 crore—representing 34.11 percent of the total budget and 4.86 percent of GDP—towards women's empowerment and development, including social safety net programmes. However, many economists argue that the gender budget is not properly monitored, making it difficult to assess the impact of these expenditures on women each year. Particularly concerning is that the overall education and health budgets have consistently remained low over the years in Bangladesh—1.7 percent of GDP for education and 0.75 percent for health—thus failing to improve the quality of education and healthcare service delivery in the country. By contrast, the education budget in EU countries averages about 4.7 percent of GDP in 2025, with the highest allocations in Sweden (7.1 percent) and Denmark (6.4 percent). The average government expenditure on health in EU countries was 7.3 percent of GDP in 2023, rising to 12 percent in Germany and France, and over 10 percent in Austria, Belgium, Sweden and Portugal. These comparisons highlight the inadequacies of public spending on health and education in Bangladesh.

In Bangladesh, microfinance institutions (MFIs) play a significant role in economically and socially empowering women. By 2023, as many as 731 MFIs certified by the Microcredit Regulatory Authority had benefitted over 40.86 million members, around 90 percent of whom are women. These MFIs disbursed a total of Tk 2,500 billion in soft loans to their members for undertaking small and medium enterprises. They also provide various services such as basic education, training, maternal health and technical support. According to World Bank estimates, microfinance lifted about five million people out of poverty between 2000 and 2020.

In terms of quantitative estimates, the coverage of disadvantaged women under government and NGO programmes may appear impressive but remains insufficient. Various structural weaknesses persist in these programmes. One of the key areas where women continue to lag behind is in financial inclusion. There are gender gaps and exclusions in financial literacy and numeracy, access to finance, and digital financing, all of which prevent women from fully benefiting from available financial services in Bangladesh.

Data shows that around 65 percent of women remain unbanked, only 7 percent of registered small and medium-sized borrowers are women, and the gender gap in mobile phone ownership is approximately 30 percent. These barriers limit women's access to adequate finance and hinder the achievement of true economic empowerment. Although several banks now offer female-friendly financial products, these require greater promotion, trust-building, and improvements in women's financial literacy. However, this alone will not address the root challenge faced by poor women who lack assets and income and who are therefore likely to remain unbankable—reliant solely on small-scale NGO loans.

To expedite women's economic empowerment and ensure inclusive economic growth, certain practical steps are necessary. These include taking bold decisions to increase sustainable investment in health, education, and skills development to reach 10 percent of GDP, alongside establishing proper monitoring systems, gender-disaggregated databases, and evaluation mechanisms to ensure accountability; promoting women's employment in suitable service and industrial enterprises such as leather, food processing, toy-making, sustainable energy solutions, and cottage industries; adopting stronger policy measures to expand access to soft loans for building women-friendly enterprises and providing inclusive financial literacy training; creating special industrial zones for female entrepreneurs and promoting both local and export market opportunities; prioritising women's access to industrial land, financial resources, and vocational training, as well as creating decent work opportunities; and last but not least, taking critical steps to reduce early marriage and early pregnancy in the country.

We need to accelerate efforts in these areas to enable the large and potentially productive population of working-age young women to participate meaningfully in the economy and help raise Bangladesh's stagnating growth rate.

Dr Nawshad Ahmed, a retired UN official, is an economist and urban planner. He is currently working as an independent consultant​