ECONOMYNEXT – Sri Lanka’s remittances coming through official channels gained 11.4 percent to $3.14 billion in the first six months of 2024 compared to the same period last year, helped by more expatriates using the official banking channels.
The remittances in June were $519.6 million, 9.2 percent up from the same month last year, the official data showed.
The remittances have risen continuously after the central bank gave up a parallel exchange rate regime, which compelled most expatriates to switch informal Undiyal and Hawala money transfer methods.
The island nation witnessed a 57 percent jump in remittances coming through formal banking channels to $5.97 billion in 2023, from $3.8 billion a year earlier, helped by elimination of parallel exchange rate.
The island nation has been in the process of sending more migrant workers to bring in higher foreign exchange since the country declared bankruptcy in 2022.
Worker remittances coming through official channels fell in 2021 which could not be paid for by the banking system at the official rate as money was printed to sterilize interventions and keep a policy rate down, triggering parallel exchange rates, which were settled outside the formal banking system.
Worker remittances are one of the top foreign exchange revenue earners for the island nation which is still recovering from an unprecedented economic crisis.
From April 2022, the interest rates were raised by unprecedented levels, slowing credit and the need to print money to keep rates down. (Colombo/July 06/2024)