FINANCIAL CHRONICLE – Sri Lanka’s official remittances experienced a decline, reaching a seven-month low of $695 million in June 2026. Despite this drop, the figure reflects a 9.3% increase compared to the same month the previous year, according to data from the Central Bank.
The remittance inflows for June marked the lowest level since November 2025. This decrease coincides with the depreciation of the Sri Lankan rupee since April, coupled with escalating tensions in the Middle East, which remains the primary job market for Sri Lankan expatriates.
Market experts indicate that when there is volatility in the exchange rate, many expatriates tend to shift to informal remittance channels such as Hawala and Undiyal.
In the first half of this year, remittances from Sri Lankan workers abroad increased by 23.2%, totaling $4,604.8 million compared to the same timeframe last year. The country had previously recorded an exceptional monthly remittance of $879.1 million in December and an annual high of $8,076.2 million in 2025.
The rise in remittances is attributable to a growing number of Sri Lankans seeking employment overseas, particularly as the nation continues to recover from the severe economic crisis of 2022, as per official statistics.
Following the Central Bank’s decision to discontinue a parallel exchange rate system, remittances have consistently increased, encouraging expatriates to revert to official money transfer methods instead of relying on informal channels like Undiyal and Hawala.
Since declaring bankruptcy in 2022, Sri Lanka has been focusing on sending more skilled migrant workers abroad to boost foreign exchange earnings. In 2021, there was a significant decline in official remittances as many workers opted for informal methods due to more favorable exchange rates.
This shift occurred after the Central Bank engaged in money printing to manage interventions and maintain lower policy rates, resulting in the establishment of parallel exchange rates beyond the formal banking framework.
Beginning in April 2022, the Central Bank raised interest rates to unprecedented levels to curb credit expansion and reduce the necessity for money printing. Subsequently, a more dovish monetary policy was implemented until May of this year. (Colombo/July 13/2026)
