$18,000 foreign travel quota, but limited ways to spend it

The Bangladesh Bank’s decision to increase the annual foreign exchange entitlement for adult travellers from $12,000 to $18,000 is welcome. It recognises the rising cost of international travel. Yet a higher annual entitlement offers little benefit if travellers cannot use it for ordinary and essential expenses.

I experienced this contradiction during a family trip to the United States.

I needed to buy domestic air tickets in the US for myself, my wife and my child. Like many cost-conscious travellers, I looked for cheaper fares. But when the combined fare exceeded $300, I could not complete the transaction because of the limit on online international card payments.

Although I had sufficient funds within my approved travel entitlement, I could not use them for a legitimate family expense.

The problem became more serious after I landed at Los Angeles International Airport with my daughter around midnight. I could either take an expensive airport taxi or use a much cheaper app-based service such as Uber. Unfortunately, my Bangladeshi-issued card could not be used to pay for the Uber ride.

With a tired child beside me, I had no practical choice but to take the more expensive option. The journey cost more than twice as much as an Uber ride would have.

The next morning, I asked a friend living in New York to add his credit card to my Uber account. A genuine traveller with an approved foreign exchange entitlement should not have to depend on someone else’s foreign card to pay for basic transport.

Recent measures allowing international cards to be used for certain airline ticket purchases are positive. But travellers do not always buy directly from airlines. Many use platforms such as Trip.com or compare fares on Skyscanner to find cheaper options.

The same issue arises with hotels. Travellers frequently use Booking.com or Agoda because these platforms often offer better rates than hotels’ own websites. A policy that permits payment to a direct provider but restricts payments through a recognised, lower-cost intermediary simply makes travel more expensive.

When legitimate card payments fail, travellers may be forced to carry more cash or turn to informal payment channels. This weakens the formal financial system rather than protecting it.

Bangladesh must, of course, protect its foreign exchange reserves and prevent misuse. But restrictions should be proportionate to the actual risk. Banks already maintain detailed transaction records, while financial and tax systems are becoming increasingly integrated. Authorities can identify and investigate suspicious transactions without blocking routine travel expenses.

The Bangladesh Bank should therefore consider raising the single-transaction ceiling to a reasonable level and introducing clear exemptions for genuine travel services. These should cover domestic air tickets purchased abroad, recognised hotel-booking platforms, app-based transport, rail tickets and car rentals.

Banks should also receive uniform instructions so that legitimate payments are not declined simply because a merchant is classified as an online intermediary rather than an airline or hotel.

The principle is simple: if the state authorises a traveller to use a certain amount of foreign currency, that person should be able to spend it on legitimate, traceable travel expenses.

Increasing the annual entitlement to $18,000 is progress. But the reform will remain incomplete until it works in real life, at the airport, on booking platforms and during a late-night journey with a child.

The writer is the head of operations and CFO of The Daily Star