Sri Lanka’s inward remittances fall to lowest in 12 years

Sri Lanka's inward foreign remittances fell to USD 271.4 million in November, according to the country's central bank, which the analysts said was a 12-year low.

This represents a drop of over 50 percent year-on-year with the 2020 November figure of USD 611.7 million, the central bank figures showed.

In April 2009, it was USD 266.3 million.

The island's economy has seen over a 17 percent drop in foreign remittances with a total of USD 5,166.3 million in the first 11 months of 2021, in comparison to the USD 6,291.2 million in the corresponding period in 2020.

Remittances by Sri Lankan migrant workers are a key source of foreign currency. The Central Bank earlier this month said that action would be taken against private exchange dealers who offered more than the central bank's official rate of 200 rupees per USD.

The central bank has offered 210 rupees to the USD parallel exchange rate with a 10 rupee incentive to expatriate workers, exporters, and resident foreign salary earners who have been asked to force convert dollars.

The drop in remittances is reported as the international rating agencies cast doubts on the government's ability to meet its external debt obligations in 2022 and 2023 in the absence of new external financing sources.

Sri Lanka has debt payments obligations which include two international sovereign bonds of USD 500 million due in January 2022 and USD 1 billion due in July 2022.