Despite Bangladesh sending a record 5.26 lakh workers to Saudi Arabia in FY24, remittances from the Gulf nation have dropped to $2.74 billion, down from $5.72 billion in FY21. In contrast, the UAE, which hired fewer Bangladeshi workers, sent $4.64 billion in remittances in FY24. Experts attribute this decline to a high number of undocumented workers—60-70% in the last three years—who cannot send money through official channels due to unpaid Iqama fees. Many resort to hundi, an informal money transfer system. Additionally, money laundering from Saudi Arabia to the UAE, rising Hajj and Umrah payments, and increased dollar demand by businesses have further diverted remittances. Complaints from Saudi-based workers have surged by 184%, with 80% involving work permit issues. In response, Bangladesh has blacklisted 24 Saudi firms. Discussions between both governments continue to address these challenges, including reducing Iqama fees and curbing illegal remittance channels.

Yields on Bangladesh’s government securities have sharply declined in February, with rates falling nearly two percentage points since December, reaching just over 10%. In the latest auctions, banks submitted bids significantly exceeding government targets—Tk22,389 crore for a Tk4,000 crore five-year bond and Tk8,072 crore for a Tk3,500 crore 91-day bill—forcing the central bank to lower rates to 10.47% and 10.35%, respectively. This decline, driven by excess liquidity and weak private sector loan demand, suggests a likely reduction in lending rates, stimulating investment and curbing inflation. The Bangladesh Bank, keeping its policy rate at 10%, may revise it downward soon. Banks’ liquidity positions have improved, with excess liquid assets rising by Tk19,000 crore in six months. Meanwhile, liquidity support from the central bank has declined, with Tk17,000 crore utilized from a Tk23,500 crore special support fund. The IMF forecasts further global monetary policy easing, reinforcing Bangladesh’s expected rate adjustments.

In FY 2023-24, Bangladesh repaid $6.078 billion in foreign loans, a 27% increase from $4.779 billion in FY 2022-23. By the first half of FY 2024-25, total foreign debt surpassed $80 billion. The government secured new loan commitments exceeding $2 billion, with $3.26 billion disbursed. During this period, $1.9818 billion was repaid, including $1.2342 billion in principal and $750 million in interest. Key repayments included $1.265 billion for the Rooppur Nuclear Plant, with $260 million in interest paid to Russia despite sanctions. The government’s own loan repayment was $3.372 billion, while state-owned entities repaid $2.706 billion. The highest repayments went to ADB ($1.4255 billion) and IDA ($931.6 million). Experts warn of rising repayment pressure as grace periods for major projects end, necessitating careful foreign loan management. Projections indicate repayments will rise by over $1 billion next year, stressing foreign reserves and necessitating renegotiation of loan terms.