Remittances up 15% to $548 million in February

Sri Lanka’s remittances from its overseas expatriate workers gained 15.1 percent to $548.1 million in February 2025 compared to the same month last year, helped by more expatriates using official banking channels.

The foreign inflow through the formal banking sector gained 16.3 percent in the first two months of this year to $1.12 billion compared to $963.7 million in the same period last year.

The worker remittances hit a six-year high in 2024 after a record number from the island nation’s labor force left the country searching for foreign jobs amid Sri Lanka’s recovery from an unprecedented economic crisis, official data showed.

In 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.

Worker remittances are one of the top foreign exchange revenue earners for the island nation, which is still recovering from an unprecedented economic crisis that hit in 2022.

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 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 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 to unprecedented levels, slowing credit and the need to print money to keep rates down. Later, the Central Bank started its dovish monetary policy.