For the first time after more than a decade, Sri Lanka’s number one foreign exchange earner, worker remittances has declined by 0.5 percent during the year 2015 reflecting a decline of receipts from the Middle East amidst crashing oil prices, the Central Bank announced last week.
Workers’ remittances in the year 2014 had amounted to US$ 7.018 billion with a growth of 9.5 per cent in 2014 compared to US dollars 6.4 billion in 2013. Hence it is estimated that remittances had marginally contracted to about US$ 6.983 billion last year.
In 2013 remittances grew by 7% while in 2011 inward remittances grew by as much as 25 percent.
Releasing statistics for November 2015, the Central Bank said that workers’ remittances declined by 7.2 per cent, year-on-year, to US dollars 574.5 million from US dollars 619.3 million recorded in November 2014. During the first eleven months of 2015, the cumulative inflow from workers’ remittances had increased marginally by 0.8 per cent to US dollars 6,361.8 million in comparison to the corresponding period of 2014.
“The comparatively low growth in workers’ remittances during this period could be attributed to the drop in income in oil exporting Middle Eastern countries with decline in world oil prices,” the Central Bank said.
Meanwhile, export earnings contracted by 9.3 percent in November 2015 causing a cumulative decline of 4.4 percent during the first eleven months of the year. Import expenditure also recorded a decline of 11 percent in November 2015, and the cumulative decline in expenditure on imports was 2.1 percent during the first eleven months of 2015.
“Gross official reserves were estimated at US dollars 7.3 billion by end 2015, while the Sri Lanka rupee, which depreciated by 9.0 percent against the US dollar in 2015, recorded a marginal appreciation thus far during 2016,” the Central Bank noted.
The Monetary Board of the Central Bank last week decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank unchanged at 6.00 percent and 7.50 percent, respectively.
Headline inflation based on the National Consumer Price Index (NCPI, 2013=100) decelerated to 4.2 percent, on a year-on-year basis, in December 2015 from 4.8 percent in the previous month, and registered a value of 3.8 percent on an annual average basis. CCPI based core inflation however edged up in December 2015, recording 4.5 percent, on a year-on-year basis, in comparison to 4.3 percent in the previous month.