FINANCIAL CHRONICLE – In July 2026, Sri Lanka experienced a notable increase in remittances from expatriate workers, which surged by 11.5 percent to reach US$ 777.6 million. For the first seven months of the year, total remittances amounted to US$ 5,382.4 million, reflecting a robust growth of 21.4 percent, according to data released by the Central Bank.
This uptick in remittances follows a dip to a seven-month low in June, attributed to the depreciation of the rupee amid escalating tensions in the Middle East, which serves as the primary foreign job market for Sri Lankans. Currency traders have reported that the rupee has stabilized and even shown slight appreciation since last month.
Market analysts indicate that during periods of exchange rate volatility, expatriates often resort to informal remittance channels such as Hawala and Undiyal, which operate outside the formal banking framework. In December of the previous year, the country recorded an unprecedented monthly remittance of US$ 879.1 million, and for 2025, the total annual remittance reached a historic high of US$ 8,076.2 million. Experts suggest that remittance levels could potentially set new records this year.
The rise in remittances can be linked to an increasing number of Sri Lankan workers seeking employment abroad, particularly as the nation recovers from a severe economic crisis in 2022, as per official statistics. Since the Central Bank abolished a parallel exchange rate system in 2022, remittances through formal channels have witnessed a steady rise, encouraging expatriates to transition away from informal money transfer methods.
Efforts to send more migrant workers, particularly skilled professionals, have intensified since Sri Lanka declared bankruptcy in 2022, aiming to boost foreign exchange earnings. In 2021, remittances through official avenues plummeted as many expatriates opted for informal channels that offered more favorable exchange rates. This situation arose following the Central Bank’s money printing to manage interventions and maintain lower policy rates, resulting in parallel exchange rates emerging outside the formal banking system.
Beginning in April 2022, interest rates were raised to unprecedented levels, which curtailed credit availability and reduced the need for money printing. The Central Bank subsequently adopted a more accommodating monetary policy until May of this year. (Colombo/August 11/2026)
