Sri Lanka worker remittances rose sharply in November 2025, underscoring renewed confidence in formal banking channels and reinforcing the sector’s critical role in stabilising foreign exchange inflows during the country’s ongoing economic recovery.
Sri Lanka worker remittances climb sharply in November on strong inflows
Sri Lanka worker remittances recorded a strong rebound in November 2025, rising 27 percent year-on-year to 673.4 million US dollars, according to data released by the Central Bank of Sri Lanka. The surge lifted total inflows for the first 11 months of the year to 7.2 billion dollars, marking a 20.7 percent increase compared to the same period last year and pushing remittances beyond the country’s previous all-time record.
With one month still remaining in the year, Sri Lanka has already surpassed its 2017 peak of 7.16 billion dollars in annual remittance inflows, a milestone that reflects both structural policy changes and renewed trust among expatriate workers. Economists expect further inflows in December, traditionally a high-remittance month due to festive-season transfers, potentially widening the gap between 2025 and past records.
Worker remittances remain Sri Lanka’s single largest source of foreign exchange, providing a crucial buffer for the balance of payments as the island nation continues to recover from its unprecedented 2022 economic crisis. The latest figures suggest that inflows from overseas workers are regaining their central role in supporting currency stability, import financing, and domestic consumption.
The rebound builds on momentum seen in 2024, when remittances reached a six-year high as a record number of Sri Lankans migrated abroad in search of employment opportunities. Full-year inflows in 2024 rose 10.1 percent to 6.57 billion dollars, up from nearly 6 billion dollars the year before. The trend reflected both increased outward migration and a gradual return to formal remittance channels following policy adjustments.
Central bank officials and analysts attribute much of the recent growth to the dismantling of the parallel exchange rate regime that previously distorted money flows. During 2021 and early 2022, official remittances fell sharply as expatriates increasingly relied on informal transfer systems such as Undiyal and Hawala, which offered more attractive exchange rates than the formal banking sector.
Those distortions emerged after the central bank printed money to sterilise interventions and maintain lower policy rates, triggering parallel exchange rates that operated outside regulated financial channels. As confidence in the official system eroded, significant volumes of foreign earnings bypassed banks, weakening reported inflows despite steady overseas employment.
The turning point came after interest rates were raised sharply from April 2022 in response to mounting macroeconomic pressures. Higher rates slowed credit growth and reduced the need for monetary financing, helping narrow the gap between official and informal exchange rates. Once the parallel market collapsed, expatriate workers began shifting transfers back to licensed banks and authorised money transfer operators.
Since then, Sri Lanka worker remittances have risen steadily, benefiting from improved transparency and more predictable exchange rate management. Even as the central bank later adopted a more dovish monetary stance, the credibility restored during the stabilisation phase helped sustain confidence in formal remittance channels.
Government policy has also played a supporting role. In its 2026 budget, the Sri Lankan government pledged to introduce housing loan schemes and a contributory pension programme for citizens employed overseas. These measures are aimed at strengthening long-term ties between migrant workers and the domestic financial system, encouraging them to remit a larger share of earnings through official routes.
Beyond immediate foreign exchange benefits, rising remittances have broader macroeconomic implications. They support household consumption, improve bank liquidity, and help finance imports without excessive reliance on external borrowing. For a country emerging from debt restructuring and fiscal consolidation, stable remittance inflows offer a rare source of non-debt-creating foreign currency.
The composition of outbound labour is also evolving. Since declaring bankruptcy in 2022, Sri Lanka has intensified efforts to deploy more skilled and professional workers overseas, seeking higher-value employment that generates stronger foreign exchange returns. Officials believe this shift will help stabilise remittance flows over the medium term, even if total migrant numbers fluctuate.
Despite the positive trajectory, analysts caution that remittance growth remains sensitive to global labour market conditions, host-country immigration policies, and domestic exchange rate credibility. Any return to monetary instability or policy-induced distortions could once again divert flows away from official channels.
For now, the November data reinforces optimism that remittances will remain a cornerstone of Sri Lanka’s external sector recovery. As other foreign exchange earners such as tourism and exports face periodic volatility, steady inflows from overseas workers continue to provide a vital anchor for economic stability and confidence.