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Tuesday January 25th, 2022
Economy

Sri Lanka foreign remittances down 60-pct in December 2021

ECONOMYNEXT – Sri Lanka’s worker remittances were down 60 percent from a year earlier to 325.2 million US dollars in December 2021 with foreign exchange diverted to the unofficial market as money printing undermined the credibility of a 200 to the US dollar peg.

Full year 2021 official remittances were down 22.7 percent to 5,491.5 million US dollars.

Sri Lanka’s official remittances started to fall as money printed by the central bank to keep interest rates down was used up in the economy, driving imports up and foreign exchange controls were tightened, creating a demand parallel market dollars and shattering the credibility of the peg.

In the Undiyal/Hawala traditional net settlement markets, parallel the parallel exchange rate is around 240/250 rupees, making it an attractive path for expatriate workers who send money home.

Sri Lanka’s central bank is offering 10 rupees extra for official transactions in a bid to wean expat worker away from the traditional net settlement systems.

Analysts have urged the central bank to hike rates to stop printing money which creates foreign exchange shortages and boosts import demand.

Though policy has improved from September with money no longer printed to maintain excess liquidity in money markets to target call rate below the ceiling, interventions are sterilized with new money. (Colombo/Jan14/2021)

Comment (1)

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  1. Moiez Mohamed says:

    We the sri lankans working in middle eastern countries have been sending our hard earned money for the last so many years and we never gained anything from any government, they promised soooooo many things and never heard anything from the middle eastern workers who send remittances to sri lanka and the ministers gained their own business, so now we the sri lankans thought of not sending the money thru banks and we will send thru hundiyal so that we can get extra rupees where is else the banks says they will pay extra 20 rupees, tell them to put that 20 rupees in their ass.

Comments

Comment (1)

Your email address will not be published. Required fields are marked *

Your email address will not be published. Required fields are marked *

  1. Moiez Mohamed says:

    We the sri lankans working in middle eastern countries have been sending our hard earned money for the last so many years and we never gained anything from any government, they promised soooooo many things and never heard anything from the middle eastern workers who send remittances to sri lanka and the ministers gained their own business, so now we the sri lankans thought of not sending the money thru banks and we will send thru hundiyal so that we can get extra rupees where is else the banks says they will pay extra 20 rupees, tell them to put that 20 rupees in their ass.