SL migrant workers offered Rs.10 per dollar remittance in Dec. 2021

Sri Lanka’s Central Bank (CB), in a bid to encourage migrant workers to use official banking channels to remit their money instead of through unofficial channels, is offering an extra Rs.10 per each dollar remitted to Sri Lanka for the month of December only.

The CB said on Wednesday that it has decided to pay an incentive of Rs. 8 per US dollar for workers’ remittances, in addition to the existing incentive of Rs.2 under the “Incentive Scheme on Inward Workers’ Remittances”, when such funds are remitted through Licensed Banks (LBs) and other internationally accepted formal channels and converted into Sri Lankan rupees during the period December 1 to 31.

The percentage of remittances coming through unofficial channels like ‘undiyal’ or ‘hawala’ has increased in recent times after the dollar rose in the unofficial market to between Rs.220-240 while the official rate remains at Rs.203.

The additional incentive provided by the CB is expected to attract more workers’ remittances to the country through the formal banking channels, thereby improving the foreign currency liquidity in the domestic foreign exchange market.

At the same time, several measures are being taken by the CB and the law enforcement authorities to curtail informal fund transfer channels, which would, in turn, further encourage migrant workers to use formal channels to remit their hard-earned foreign exchange to the benefit of their dependents, the CB said in a statement.

Meanwhile the CB, in the search for more US dollars to fund debt payments, said it received seven responses, among which there were five leading international banks and two established investment arrangers to a request for proposals for Securitised Financing Arrangement for the Government of Sri Lanka.

The CB, on behalf of the Government, requested proposals on November 12 from international investor community for the arrangement of a medium-term foreign currency financing facility by securitising the foreign currency receipts of the CB under the mandatory sale of 10 per cent of workers’ remittances converted into Sri Lankan Rupees by licensed banks.

“These responses are being reviewed to determine the most suited modality to initiate the securitised financing arrangement,” the CB said..