Saturday, July 31, 2021
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CB brings back rule of 10% weekly conversion of workers remittances

Brought back the rule of mandatory conversion of 10% of workers remittances to rupees by banks on a weekly basis. The fresh directive to banks was issued last week (28 May).

Previously, via a directive on 17 March, the Central Bank suspended the mandatory conversion for worker remittances until further notice. The original move to make 10% conversion mandatory (when such conversion amounts to $ 1 million) was made in January this year and/or on a quarterly basis.

Workers’ remittances inflow has been robust so far this year. In the first four months of 2021, workers remittances amounted to $ 2.38 billion, up 21% from the corresponding period of last year.

Last year, workers remittances amounted to $ 7.1 billion, up by 5.8% from 2019.

To incentivise sending workers remittances through formal fund transferring channels, the Government is paying Rs. 2 per every dollar as per a proposal of the 2021 Budget.

Additionally, foreign currency income earned through employment by a Sri Lankan national who is working or has worked abroad, or a Sri Lanka national who resides in Sri Lanka and earns foreign currency income through rendering services in nature of employment abroad, will qualify to receive an additional Rs. 2 per dollar converted to Sri Lankan Rupees from 28 December 2020.

(FT)