Inward remittances improved last month
Remittances by migrant workers and others are seen improving over the past month, bankers say.
Last month has seen a marked improvement in inward remittances by migrant workers, Kanchana Ratwatte, Chairman Bank of Ceylon told the Business Times noting that this is because the grey market has considerably shrunk.
He said that the Central Bank’s decision to close open accounts, which are essentially import settlements coming through third parties, reduced the demand for dollars.
The inward remittances trend is considerably improving, a CEO of a commercial bank agreed noting that the grey market is disappearing considerably. “This is mainly due to the Central Bank measures recently taken, such as import restrictions and letting the dollars float to the current levels without artificially holding etc,” he said. As of Thursday, the exchange rate stood at Rs. 361 to a US dollar. A senior banker said that the sentiments from foreign banks and other entities on the Sri Lankan banking system will improve once the International Monetary Fund fund facility is approved by the donor agencies board. “This is entirely dependent on the positions that the creditors take and there is a positive sentiment starting to happen, but it is still not tangible,” he added.
Another banker said that the staff level agreement does not mean that money will flow into Sri Lanka because the country needs to restructure debt first.
Murtaza Jafferjee, Chair Advocata Institute, said the dollar liquidity situation has improved, but the country is still not out of the woods as yet. “There is significant debt restructuring the country still has to do.”
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