Uncertainty over remittance allowance of Rs. 38/- per $1

COLOMBO (News 1st); There is uncertainty surrounding the worker remittances incentives awarded by the government of Sri Lanka following the devaluation of the Sri Lankan Rupees.

Sri Lanka’s Central Bank of Sri Lanka positioned the Rupee to Rs. 230/- against the US Dollar with effect from Monday (7), to allow flexibility in the exchange rate.

As of Wednesday (9), the selling price of Dollar at commercial banks is Rs.230/-.

Sri Lanka’s Cabinet of Ministers on Tuesday (8) granted approval to increase the incentive allowance of migrant workers from Rs. 10/- per USD to Rs. 38/- per USD.

In 2021, the Monetary Board of the Central Bank of Sri Lanka (CBSL) decided to pay an incentive of Rs. 8.00 per US dollar for workers’ remittances, in addition to the existing incentive of Rs.2.00 under the “Incentive Scheme on Inward Workers’ Remittances.”

However, it was revealed at the media briefing that the Cabinet was not aware of the CBSL decisions on exchange rates at the time of making this decision.

Cabinet spokesperson, Minister Dullas Alahapperuma said that the Central Bank had not officially communicated its decision, while the Cabinet reached a decision on worker remittance allowances.

However, in a letter addressed to the Chief Executive Officers of all licensed commercial banks, the Governor has informed that the Central Bank will discontinue the incentive of Rs. 10 offered on the conversion of workers' remittances and on the conversion of foreign currency notes held in hand.

The letter notes that the recent decision of the Government to provide a new incentive to expatriate workers who convert remittances would be clarified by the government in due course.

As mentioned by the Cabinet Spokesperson, the Governor of the Central Bank is yet to convene a press conference to explain the matter.