- Expats sent back US$359.3 million in remittances in September
- September also marks the first annual increase in remittances since the start of the current downward streak.
- SL raised a total of US$2,574.1 million in worker remittances for the period January to September
Sri Lankans working abroad have continued to send more money lately after bottoming out in the first half of this year.
Their efforts are helping the country mitigate the consequences of the world’s worst currency crisis that has triggered runaway inflation and widespread commodity shortages, resulting in protracted political and social unrest.
Sri Lankan expatriates sent back US$359.3 million in remittances in September. This is the highest so far this year after the authorities allowed greater exchange rate flexibility from March, followed by restrictions on the use of accounts opened by some imports, effectively reduces the attractiveness of informal channels, as their premiums over official exchange rates have become less attractive.
Recently, the government also announced a host of other incentives ranging from increased customs exemptions to import permits for electric vehicles to the opening of a dedicated entry for migrant workers to entice more expats to use formal channels when repatriating their money.
The September record brought the current streak of rising inflows to its third consecutive month since July, measured on a monthly basis.
Meanwhile, September also marked the first time that remittances managed to record growth on a year-over-year basis since the start of the current downward streak in June 2021, which eventually unraveled the whole of Europe. economy affected by the severe shortage of foreign exchange.
In September 2021, Sri Lanka received $353.2 million in remittance income in its fourth consecutive month of decline.
The authorities base their hopes on the persistence of a trend towards increased use of formal circuits due to the less attractive bonuses offered by informal circuits and the exodus of people leaving the country to escape working and living conditions. most deplorable caused by the economic crisis this year and should bring part of their income back to the country.
However, unlike in the past, many qualified employees leave the country with their entire families to settle in countries with better living conditions, and therefore they are unlikely to have much reason to send money back. .
In any case, it is doubtful that remittances would return to their pandemic highs of around US$550-600 million per month on average, as authorities have spotted continued overstatement of workers’ remittances by banks. due to their inability to distinguish what was to come. workers from the rest of other foreign remittances.
The issue is now resolved and therefore the new data would show actual remittances from Sri Lankans working abroad.
With the September inflows, Sri Lanka collected, on a cumulative basis, $2,574.1 million in the first nine months in the form of workers’ remittances, compared to $4,577.5 million during of the same period in 2021.
However, 2021 is not a suitable year of comparison, as the country lost about US$1.5 billion last year out of the US$7.0 billion the country typically earns from remittances. workers.