By: Isuru Parakrama

November 11, Colombo (LNW): Worker remittances for October showed significant improvement compared to both the previous month and the same period last year, reinforcing Sri Lanka’s foreign currency reserves and bolstering the rupee’s stability.

Sri Lankans working abroad sent home an impressive US$ 587.7 million in October, just as the year-end festive season approaches—a period traditionally marked by increased remittances.

This inflow represents a rise from the US$ 555.6 million recorded in September 2024 and a notable increase over the US$ 517.4 million received in October 2023, showcasing the robust growth in remittances.

The latest remittance figures have pushed the total earnings from foreign workers to US$ 5,431.5 million for the year, marking an 11.7 per cent increase over the same period in 2023.

This surge brings Sri Lanka closer to the elusive US$ 7 billion annual mark, a milestone not achieved since 2020.

The decline in remittance inflows in subsequent years had contributed to the economic turmoil that culminated in early 2022. However, the current positive trend in remittances, coupled with strong tourism earnings, has enabled the Central Bank of Sri Lanka (CBSL) to buy US$ 189.5 million from the domestic forex market in October alone—an unusually large amount for a single month.

This extends the CBSL’s streak as a net foreign currency buyer and further strengthens the country’s gross official reserves, which have grown from US$ 5,994 million at the end of September to US$ 6,467 million.

The combined effect of these inflows and the debt standstill on foreign repayments has also contributed to a stronger rupee.

The currency has appreciated by 10.7 per cent so far this year, following a 12 per cent gain in 2023, reflecting renewed stability in the external sector.

Remittances and the strengthening rupee have also eased inflationary pressures by reducing the cost of imported goods, offering some relief to consumers after two challenging years of high inflation.

Looking forward, Sri Lanka’s remittance inflows are expected to surpass US$ 7 billion, driven by the large numbers of Sri Lankans who have migrated in recent years in search of better opportunities abroad.

Their continued financial support to families back home is likely to provide a steady source of foreign exchange, reinforcing the country’s economic recovery and financial resilience.