Remittances sent home by Sri Lankans working abroad extended their growth into February, indicating that those who had left their home countries in large numbers in the past few years are now sending dollars back to their home countries and through official banking channels, in contrast to the informal money changers that many of them used.
In February 2025, Sri Lankans sent back remittances worth US$548.1 million, up from US$476.2 million a year earlier, but slightly lower than the US$573.0 million they sent a month earlier in January 2025. While monthly variations can be ignored, as some seasonal factors associated with such inflows do not capture them, the year-on-year growth is more than $1 billion, with cumulative two-month inflows at $1,121.1 million, a robust 16.3 percent.
The pandemic and the resulting economic crisis have pushed them into poverty and forced at least one million people to leave Sri Lanka for greener pastures in the past three years in search of some form of employment.
Many queued at the Department of Immigration and Emigration to obtain their passports, with some, until recently, taking up a spot at the front of a queue that stretched for miles even days before. Regular migration for overseas employment slowed, and fear of contracting the virus prompted Sri Lankans working abroad to return home. The then administration facilitated chartered flights to bring them home, kept them safe in government-run quarantine centres, and provided them with food and other medical assistance.
Meanwhile, many turned to informal money changers, sending money back home through channels such as undial and hawala. They paid a hefty premium of Rs 200 set by the then government to ensure that the country was isolated from the global commodity super cycle and to ensure that prices remained moderate.
But the regular inflow of workers’ remittances fell by half, and the country faced a foreign exchange shortage, leading to some shortages of essential goods such as energy, gas, medicines and food. The situation was further exacerbated by the war in Ukraine, which saw global oil prices rise to around US$70 per barrel, accelerating inflation worldwide.
The depreciation of the rupee in March 2022 and the simultaneous crackdown on money exchangers by former Governor Ajith Nivard Cabraal allowed the Central Bank to gradually regularize the inflow of workers’ remittances.
In 2024, remittance inflows to Sri Lanka were US$6,575.4 million, a 10.1 percent increase over 2023 and the highest since 2020.
In 2025, Sri Lanka is expected to generate slightly more than US$7.0 billion in remittances, which will strengthen its balance of payments and foreign exchange reserves.
