October remittances at US$ 588mn provide strong bulwark for economy

Worker remittances for October continued to come in stronger against both a month ago as well as a year ago period helping both the foreign currency reserves and the rupee to remain strong.

Sri Lankans working abroad sent back US$ 587.7 million in October, just ahead of the year end festive season which usually sees a further bump up in the monies that the country typically receives.

What the country received in October is compared with US$ 555.6 million in September 2024 and US$ 517.4 million received in the same month last year, reflecting the strength of the inflow.

The October receipts brought the total earnings received from remittances to US$ 5,431.5 million, up 11.7 percent from the same period last year, and also bringing the full year income at a striking distance from the once elusive US$ 7.0 billion.

The last time Sri Lanka was able to surpass the US$ 7.0 billion income mark from remittances was back in 2020 and then the inflow faltered, causing the economy to sputter by early 2022.

The continued strength in remittances and the tourism inflows, helped the country’s Central Bank to purchase US$ 189.5 million from the domestic foreign currency market, a fairly large amount for a single month and extend its months-long streak in remaining a net buyer of foreign currency.

This helped the country to further bolster its gross official reserves which rose to US$ 6,467 million from US$ 5,994 million by the end of September.

These strong inflows amid the debt standstill on most of the foreign currency debt repayments also helped the country to strengthen the rupee against the dollar.

The rupee has appreciated by 10.7 percent year-to-date on top of a 12 percent gain in value in 2023.

Remittances have not only helped the country to regain the external sector strength but also to partly reverse much of inflationary pressures seen during the last two years, by easing prices of imported goods.

Sri Lanka, going forward should be able to collect well over US$ 7.0 billion from remittances as a large number of people left the country in the last two years, seeking better jobs and living conditions elsewhere and they will send part of their earnings to help support their families back home.