ECONOMYNEXT – Sri Lanka’s worker’s remittances rose 8.0 percent to 554.2 million US dollars in February 2016 from a year earlier, keeping up the momentum seen in January, official data showed.
Remittances rose 7.6 percent to 563.4 million US dollars in January 2016 from a year earlier.
In the first two months of 2016 remittances rose to 1,176 million US dollars from 1,035.2 million US dollars a year earlier.
Total remittances fell 0.5 percent to 6,980.3 million US dollars in 2015.
Central Bank Governor Arjuna Mahendran told reporters last week that in December 2014 remittances surged partly due to election funding related flows.
In 2015 the central bank also printed money and put pressure on the currency but manipulated the spot market rate which also may have encourage more funds to come through unofficial channels, analysts say.
Manipulated rates also encourage Middle East returnees to convert in the curb market, where fair market rates are given to them.
Partly due to central bank manipulation and also due to uncertainty, there is more than a 4 rupee gap in the buying and selling rates offered to retail customers in the banking system.
The curb market has a narrower spread of around 2 rupees, helping Middle East returnees.
Sri Lanka’s central bank has loose and contradictory monetary and exchange rate policy which has led to a constantly depreciating ‘beggar my labour’ policy based on unsound money, forcing Sri Lankans to seek manual work abroad especially in the Middle East to survive.