First half remittances surpass $3.1 billion

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 last year, helped by more expatriates using the official banking channels.

The official data showed that the remittances in June were $519.6 million, 9.2 percent up from the same month last year.

The remittances have risen continuously after the central bank gave up a parallel exchange rate regime, which compelled most expatriates to switch to informal Undiyal and Hawala money transfer methods.

The island nation witnessed a 57 percent jump in remittances from formal banking channels to $5.97 billion in 2023, from $3.8 billion a year earlier, helped by eliminating the parallel exchange rate.

The island nation has been 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 among 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