Bangladesh Bank proposes currency swap with Maldives to ease workers' remittances

Bangladesh Bank has submitted three proposals to the Maldives Monetary Authority (MMA), including a currency swap arrangement, to make it easier for Bangladeshi workers in the Maldives to send money home.

The proposals come as remittances from the Maldives to Bangladesh declined by 16.4% in the 2025–2026 fiscal year, according to Bangladesh Bank statistics.

Remittances fell from USD 141 million in the 2024–2025 fiscal year to USD 118 million in 2025–2026. During the first three months of the current fiscal year, Bangladesh received USD 38 million in remittances from the Maldives.

In a letter sent to the MMA Governor last Thursday, Bangladesh Bank Governor Dr Ahsan H Mansur's successor, Md Mostaqur Rahman, raised concerns about difficulties faced by Bangladeshi workers when transferring their earnings from the Maldives.

The letter outlined three proposals intended to address the challenges.

The first proposal seeks to introduce a mechanism through the Asian Clearing Union (ACU) that would allow remittances to be initiated in Maldivian rufiyaa, with recipients receiving the funds in Bangladeshi taka.

The second proposal involves establishing an arrangement allowing Bangladeshi workers travelling to the Maldives to make travel-related payments in Maldivian rufiyaa.

Under the proposed system, banks in Bangladesh would issue taka-denominated cards, with transactions settled through an arrangement agreed between the two countries.

The third proposal calls for exploring a currency swap agreement that would facilitate the transfer of earnings by Bangladeshi nationals working in the Maldives to Bangladesh.

Bangladesh Bank said the proposed arrangements would be implemented in accordance with the laws and regulations of both countries and through appropriate financial mechanisms.

The letter also proposed a meeting between the two central banks to discuss the arrangements further.

The proposals seek to address difficulties faced by foreign workers in the Maldives when accessing foreign currency for international transfers.

Many overseas banks and remittance service providers do not accept Maldivian rufiyaa for foreign exchange transactions, requiring workers to obtain US dollars before sending money abroad.

With limited access to dollars through official channels, some workers resort to purchasing foreign currency on the parallel market at rates above the official exchange rate.

Workers may also incur additional charges when transferring funds through formal remittance services.

These exchange rate differences and transaction fees increase the cost of sending earnings abroad, reducing the amount received by workers' families.

The proposed arrangements would provide alternative channels for transferring money between the Maldives and Bangladesh, potentially reducing dependence on US dollars for remittance transactions.