Sri Lanka’s remittances hit July record as migrant workers send home US$777.6 million

Central Bank of Sri Lanka data showed that official remittances from expatriate workers increased by 11.5 per cent year-on-year to US$777.6 million in July 2026. The figure surpassed the previous July high of US$697.3 million recorded in 2025 and marked a recovery from June, when inflows stood at US$695.02 million.

July’s performance was also 12 per cent higher than the previous month and ranked among the country’s strongest monthly inflows, behind US$846.9 million in May 2026 and US$814.7 million in March. Local media reports said the improvement came despite uncertainty linked to the continuing conflict in the Middle East, the largest foreign employment market for Sri Lankans.

In the first seven months of 2026, migrant workers remitted US$5.38 billion through official channels, a 21.4 per cent increase from the same period last year. The total represents the strongest January-to-July performance in Sri Lanka’s history and has strengthened expectations that annual inflows could reach a new record this year.

The latest gains follow a historic year in 2025, when remittances reached US$8.07 billion, up 23 per cent from the previous year and the highest annual inflow ever recorded. That total exceeded the earlier peak of US$7.24 billion in 2016 by around 12 per cent. Local media reports also noted that December 2025 saw a record monthly inflow of US$879.1 million.

Remittances have become Sri Lanka’s largest and most reliable source of foreign exchange during its post-crisis recovery, supporting external reserves and wider macroeconomic stability. Historically, annual inflows averaged about US$7 billion between 2014 and 2018, or roughly US$600 million a month.

The sector suffered a steep decline during the 2022 economic crisis, when remittances fell 31 per cent to a 12-year low of US$3.78 billion amid severe foreign exchange shortages and the growth of informal transfer systems such as Undiyal and Hawala. Local media reports said inflows through official channels had already weakened in 2021, as many expatriates shifted to informal methods that offered more attractive exchange rates.

The recovery began in 2023, when remittances surged 57 per cent to US$5.96 billion. Momentum continued in 2024, with inflows rising by a further 10.1 per cent to US$6.57 billion, supported by increased overseas labour migration as many Sri Lankans sought employment abroad following the economic collapse.

Although overseas departures eased slightly in 2025, remittances continued to grow, indicating higher average transfers per worker. Analysts quoted in local media reports said the strong trend reflects both sustained demand for foreign employment and greater use of formal banking and transfer channels after the Central Bank abandoned a parallel exchange rate regime in 2022.

The rupee, which came under pressure following the escalation of tensions in the Middle East, has since remained largely stable and shown a slight appreciating trend, currency dealers said.

In Parliament, Deputy Minister of Finance Anil Jayantha Fernando said the government was confident of reaching its target of US$9 billion in foreign reserves by the end of 2026, supported by the positive trend in migrant worker remittances.

Responding to a question from MP Ravi Karunanayake, the Deputy Minister said Sri Lankan migrant workers had sent more than US$5 billion during the first seven months of the year, highlighting the importance of overseas employment to the country’s external finances.

He added that the government was focusing on increasing net foreign exchange inflows through investments, exports and remittances, while also seeking to diversify foreign exchange sources and attract more Foreign Direct Investment, particularly ahead of large foreign debt repayments due in 2028.