Growing pressure on Sri Lanka’s scarce foreign exchange resources, due to the wide spread of COVID-19 across the globe, is now more real than ever before. To ease this pressure, the Central Bank of Sri Lanka (CBSL) has taken many measures to attract as well as retain more foreign exchange in Sri Lanka. Yet, it is uncertain if these efforts alone would be able to address Sri Lanka’s deepening foreign exchange concerns. This blog highlights the importance of remittances to Sri Lanka and outlines how to harness the potential of international remittances to complement other efforts already taken by the CBSL.
Remittances are often considered a stable and reliable source of development financing. In 2017, remittances to Sri Lanka declined by 1.08%, compared to the previous year, while the decline in 2018 was 2.08%. An underexplored reason for the decline in remittances is the recent changes in the composition of migrant workers from Sri Lanka. Bilesha Weeraratne highlights the gender aspect of remittances, to identify strategies to improve the country’s remittances in the future.