In a bid to bring workers’ monthly remittances down to $500 million, the government is working to introduce a special incentive package to encourage migrant workers to transfer their hard-earned foreign exchange earnings through formal channels. .
Addressing the Cabinet’s weekly press briefing yesterday, Cabinet Co-Spokesman and Foreign Labor and Employment Minister Manusha Nanayakkara revealed that talks were underway to offer a range incentives for migrant workers from Sri Lanka, including tax deductions, duty relief, interest waivers or low-interest housing loans and vouchers to encourage them to use official channels when the transfer of funds to the country.
He said he believed the proposed incentive scheme would encourage migrant workers to transfer their earnings through formal channels.
According to the Central Bank, the country’s workers’ remittances fell 52% year-on-year (YoY) to $249 million in April, while cumulative inflows fell 57% year-on-year to around one billion. during the first four months of the year.
Nanayakkara expects the proposed incentive scheme to boost workers’ monthly remittances to a minimum of $500 million, which would help the country address some of the critical issues such as meeting foreign exchange requirements in financing imports of fuel and essential goods.
However, Nanayakkara acknowledged that it would be difficult to convince migrant workers as well as other Sri Lankans living abroad to transfer their funds through official channels.
Following the Central Bank’s decision to keep the rupee/dollar exchange rate at 200 rupees last year, workers’ remittances more than halved from the recorded inflows of US$600-700 million per month.
Despite the floating rupiah, remittances have yet to rebound to earlier levels as migrant workers continue to prefer unofficial channels to banking channels, although the rates offered between official and unofficial channels have sharply increased. decreases.