1H worker remittances down $1.6 billion
- Inflows in June down 42.6% YoY to $274m despite CBSL’s realistic FX stance
- January-May departures for overseas employment were 113,757 compared to 26,450 a year ago and 117,952 in the same period of 2021
Workers’ remittances in the former plunged 51.6% to $1.6 billion from a year ago, with June reflecting a steeper decline and reversing the rise of the previous month.
In June, admissions were $274.3 million, down 42.6% from $478.4 million a year ago. June’s performance also reversed the gain seen in May to $304 million from $249 in April.
The year-over-year decline had worsened in June as well as in May.
When capital inflows in May increased, the Central Bank (CBSL) said that this could mainly be attributed to the stability observed in the domestic foreign exchange market, as well as the narrowing of the gap between the gray market and the official exchange rate.
Against this backdrop, analysts said the June decline would likely add more pressure on the government and central bank, which defended much-needed inflows through official channels and cited the exchange rate as realistic and attractive to the world. do, as opposed to what’s offered on the gray market.
After the rupee was allowed to float freely on March 7, the country saw a jump in workers’ remittances to $318 million (the highest of the year so far), but since then inflows were erratic (see graph).
The erratic performance is also worrying as more people have taken jobs overseas.
CBSL said the total number of departures for overseas employment was recorded at 22,194 in May, contributed by the unskilled (7,453), skilled (6,947) and domestic help (4,793) categories. ). The total number of departures for employment abroad during the period January-May 2022 was recorded at 113,757, compared to 26,450 during the corresponding period of the previous year and 117,952 during the year 2021.
Last year, workers’ remittances fell to $5.5 billion, their lowest level in 10 years, down 23% from 2020.
In the year to July 22, 2022, the Sri Lankan rupee depreciated by 44.5% against the dollar. Given fluctuations in exchange rates between currencies, the rupee depreciated against the Indian rupee by 40.4%, the euro by 38.4%, the pound sterling by 37.4% and the Japanese yen 33.7% during this period.