Workers’ remittances rise in 2020
View(s):Workers’ remittances from West Asia, while everything else economic-wise was gloomy owing to the COVID-19 impact, was a godsend to Sri Lanka’s flagging foreign reserves, unusually rising by 5.8 per cent to US$7,104 million in 2020 from $6,717 million in 2019. This was due to a multitude of reasons.
“We were also puzzled by the increase when everything else had been impacted by the pandemic. Later when we analysed the situation, we found many reasons for the increase,” said Dr. Chandranath Amarasekara, Director of Economic Research at the Central Bank. He told the Business Times that with remittances also rising in January 2021 compared to the same month in 2020, they were projecting an increase in remittances in 2021.
Among the reasons for the rise in remittances was that informal (illegal) channels of sending remittances were plugged due to the pandemic and thus more money came in through formal banking channels.
With the global uncertainty and relatives struggling at home, some losing jobs also saw overseas workers sending more money home. With the stock market hitting records heights, a portion of the money that came as remittances may have also gone into stocks which meant increasing amounts coming from abroad, Central Bank officials surmised.
Also it was believed that with around 100,000 workers returning owing to loss of jobs or planning to return for other reasons, another 1 million still remained who would have increased sending money back home.