Worker remittances decline for fifth consecutive month in October

• Remittance income slumps 99% in Oct. to US$ 317.4mn
• Cumulative income down 14% to US$ 4,894.9mn

Earnings from Sri Lankan migrant workers fell by more than a half in October from the same month last year extending the declining streak to the fifth consecutive month as the Central Bank is plotting plans to get tough on the informal money exchangers who are believed to be the biggest culprits for the worrisome trend that began in June this year. 

According to the newest data available, Sri Lanka had received US$ 317.4 million from Sri Lankans working abroad in October, down 98.7 percent from the US$ 630.7 million received in the same month last year. 
The October slump marked the second such month, which had half or close to a half of what was received in the corresponding month last year after September’s steeper fall. 

With the October repatriations, Sri Lanka, during the 10 months had received a cumulative US$ 4,894.9 million compared to US$ 5,679.5 million in the comparable period last year. This marked a 13.8 percent decline between the two periods, extending from about 10 percent decline recorded up to September this year over the same period last year. 

Worker remittances to Sri Lanka was on a 13-month ascent through May this year until fresh foreign currency woes created parallel foreign exchange rates, largely different from the formal market, making a fertile ground for the informal money changers, who have mostly remained dysfunctional during most of 2020 due to the pandemic. 
Despite the assurances given by the informal sector, they have failed to live up to their words prompting the Central Bank to go on a crackdown, it was revealed last week. 

The Central Bank is exploring legal and other means to rein in on the sector which has become a bane on the country to collect the much needed foreign currency when tourism receipts, the second largest foreign income earner, lost steam since last year when foreign travel came to a grinding halt.

Central Bank Governor, Ajith Nivard Cabraal last week fired the first salvo against these informal money changers identified by names such as, ‘Hawala’ and ‘Undiyal’. “We are monitoring them. We have had several instances where it has not been entirely in accordance with their assurances. We have seen certain instances where there have been lapses. We will deal with those,” Cabraal said. The current deceleration in remittances is also found to have been caused by some prospective migrants being unable to fly due to the border closures since the pandemic began last year. 

It was revealed that around 230,000 Sri Lankans annually seek foreign employment. 

The Central Bank is currently working with the Sri Lanka Bureau of Foreign Employment and other agencies to expedite their departures. 

Meanwhile, the Central Bank and the government also work together in introducing new benefits such as pension and insurance schemes for those who work abroad and send money via formal banking channels. 

By doing so, the Central Bank is hopeful that they could regularise the remittance flows through the formal banking channels.