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.
The Sri Lankan rupee (LKR) has depreciated by 10% in nominal terms by end September 2018, posing significant economy-wide risks in view of a hefty total external debt stock at 60% of GDP at end 2017. In this context, the author argues that the Sri Lankan economy is set to face testing times; dollar revenues need to be generated to match dollar-denominated debt service as never before.
While Sri Lanka’s 2018 Budget was applauded on many fronts, Bilesha Weeraratne argues that it has ignored an important aspect of the country’s economy: migrants’ remittances. Annually, over 250,000 Sri Lankans leave for foreign employment. Yet, the proposed Blue-Green Budget had no reference to remittances, nor the migrant workers who send them home. Does this mean migration and remittances are not priorities of the Sri Lankan economy?