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Supporting migrant workers

The Sunday Times, Sri Lanka, 14 November 2021 - Thankfully, the government is not touching the remittances of migrant workers and not forcing them to convert these remittances to rupees, in accordance with recent guidelines for exporters and service providers to convert their foreign earnings within one month of receiving the proceeds. Or so, the Central Bank promises.

Even though most of the foreign currency sent back home by migrants is converted to rupees to sustain their families, while the breadwinners (often female domestic workers) are abroad, there is also a category of professional migrant workers who keep some amount in dollar savings or fixed deposits. And there is a principle involved, in that migrant workers should be allowed, if needed, to keep their money in foreign currency.

When the Central Bank announced regulations on October 29 enforcing the compulsory conversion of foreign currency earnings within a month, there were fears that they would also apply to remittances by low-skilled and professional categories of migrant workers, even though the bank statement said migrant workers would be exempted.

However, those calling the Central Bank’s Foreign Remittances Facilitation Department have been told that the new regulations won’t affect remittances of migrant workers, NRFC and RFC (foreign currency account holders). “No, remittances of migrant workers and NRFC account holders won’t be affected,” an official at this new department, told one caller.

That is the case at present but whether the Central Bank will tap into this resource in the future remains to be seen as the country struggles to meet import costs with dwindling foreign exchange reserves and reports that some government-to-government credit-lines to secure foreign exchange are unlikely to work.

The creation of a new department, for the first time, is to monitor remittances and discourage Sri Lankan expatriate workers from transferring their foreign currency earnings through unofficial channels (the ‘hawala’ system), a segment which the Central Bank is keen to tap.



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