Sri Lanka’s June remittances surge 22.3% YoY

•  First half inflows hit US$ 3.74 bn
• Country on track to achieve its highest annual remittance inflows this year

Remittances from Sri Lankans abroad rose sharply to US$ 635.7 million in June 2025, a 22.3 percent increase compared to June 2024.

This brings the cumulative inflow for the first half of 2025 to US$ 3.74 billion, up 18.9 percent year-on-year. June 2024 saw remittances of US$ 519.6 million, while May 2025 recorded US$ 641.7 million. 

Based on the strong first-half performance, Sri Lanka appears on track to achieve its highest annual remittance inflows on record in 2025.

In 2024, remittances reached US$ 6.58 billion, a 10.1 percent increase from 2023. The highest annual inflow remains the US$ 7.10 billion recorded in 2020, largely attributed to the formal channel usage during pandemic-related disruptions to informal networks. 

Flows subsequently declined from 2021 to 2023 as migrants shifted towards informal channels (e.g., Undiyal, Hawala) offering higher exchange rates. This shift occurred while the official rate was fixed near Rs. 200/US$ to mitigate inflation impacts, fuelling migrant distrust over bank rates and unfounded fears of mandatory conversion rules. 

Reduced overseas employment and worker repatriations during the pandemic also contributed to lower remittances.

The recovery began after Sri Lanka floated the rupee in March 2022 and authorities clamped down on informal money changers. 

Sharply raised interest rates and import controls further reduced dollar demand, aiding exchange rate stability. Concurrently, record departures of Sri Lankans seeking better opportunities abroad expanded the migrant workforce. Increased confidence in economic reforms has encouraged more workers to send earnings home via formal channels.

Remittances remain Sri Lanka’s largest source of foreign exchange. Combined with recovering tourism and export incomes, they now fully fund the country’s import requirements and support the rebuilding of foreign currency reserves.