Worker remittances exceed US$ 1.1mn as of February
- CNL Reporter
- March 10, 2025
- Banking and Financial
- Worker remittances exceed US$ 1.1mn as of February
- 0 Comments
Money sent home by Sri Lankans working abroad extended its growth through February, indicating that those who left their home country in droves in the last couple years are now sending the dollars back home and via official banking channels as opposed to the informal money changers which many of them used to use.
Sri Lankans sent back US$ 548.1 million in remittances in February 2025, up from 476.2 million a year ago but down slightly from the US$ 573.0 million they repatriated a month ago in January 2025. While monthly changes can be ignored as they do not capture some of the seasonal factors associated with such inflows, the year-over-year growth puts the cumulative two months inflows to well over a billion dollars at US$ 1,121.1 million, up by a robust 16.3 percent.
Last three years saw at least a million people leaving Sri Lanka for greener pastures and also looking for some form of a job as the pandemic and the resulting economic crisis made them to lose their jobs while pushing them into poverty.
Many queued up near the Department of Immigration and Emigration to make their passports, some even coming days before to catch a spot in the front of the queue which until recently snaked up to many miles, a situation which became exacerbated due to the shortage of required materials to print the passports.
Sri Lanka fell into an economic crisis in 2022 as regular migration for foreign jobs slowed while the Sri Lankans who were working abroad returned home due to the fear of catching the virus for which the then administration facilitated with charter flights to bring them home, keep them in safety in State run quarantine centers while providing them with food and other medical assistance.
Many meanwhile turned into informal money exchangers to send the money back home via channels like Undiyal and Hawala as they used to offer them massive premiums to that of Rs.200 fixed for the dollar by the government at the time to ensure the country is insulated from the then commodities super-cycle sweeping through the world and also to ensure prices remain moderate.
But the regular inflows from worker remittances fell by half causing the country to confront shortages in foreign currency which then caused some amount of shortages in key commodities such as energy, gas, medicine and food. The situation was exacerbated by the war in Ukraine which sent the global oil prices higher by over US$ 130 a barrel from around US$ 70 a barrel at the time, speeding the inflation around the world.
The depreciation of the rupee in March 2022 by former Governor Ajith Nivard Cabraal and the simultaneous crackdown of the money changers helped the Central Bank to gradually regularise the inflows from worker remittances.
In 2024, Sri Lanka saw inflows of US$ 6,575.4 million from remittances, up 10.1 percent from 2023 and the highest since 2020.
Sri Lanka is expected to generate little over US$ 7.0 billion in remittances in 2025, bolstering its balance of payment and also the foreign currency reserves.
