ECONOMYNEXT – Sri Lanka’s worker remittances hit the highest in six years as more people sent foreign currency from abroad with a record number from the labour force leaving the country, official data showed.
The 2024 full year remittances rose 10.1 percent to $6.57 billion, from nearly $6 billion in the previous year, the Central Bank data showed.
In December 2024, the remittances gained 7.7 percent to $613.8 million compared to $569.7 million in the same month previous year.
Worker remittances are one of the top foreign exchange revenue earners for the island nation which is still recovering from an unprecedented economic crisis hit in 2022.
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.
A record 312,836 people left the country last year, surpassing the previous record high of 310,953 hit in 2022, data from Sri Lanka Foreign Employment Bureau 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.
Worker remittances coming through official channels fell sharply in 2021 after many expatriates switched to informal money transferring channels as they were given higher rates than formal banking channels.
The move came after the Central Bank printed to sterilize interventions and keep a policy rate down, triggering parallel exchange rates, which were settled outside the formal banking system.
From April 2022, the interest rates were raised by unprecedented levels, slowing credit and the need to print money to keep rates down. (Colombo/January 11/2025)
