Foreign currency transaction monitoring system launched

Sri Lanka will be implementing a comprehensive cross border and foreign currency transactions monitoring system through licenced banks to assist migrant workers on the continuation of their remittances from overseas.

The aim of the government is to pay more attention and provide more assistance to migrant workers when they enter a very different job market in the new normal COVID19 situation and afterwards, Finance Ministry sources divulged.

The economic crisis that triggered from the pandemic has exposed significant data gaps that restricted real time monitoring of remittance flows as well as movements of migrants.

Hence, there is a pressing need to improve the data collection systems on remittances, a Central Bank report revealed.

The International Transactions Reporting System (ITRS) will be executed through licensed banks to improve statistics including but not limited to a wide range of data on workers’ remittances while also supporting to reconcile any statistical discrepancies.

The ITRS will provide disaggregated workers’ remittances data based on the country of origin, currency, remittance receiving districts, demographics of migrant workers.

It will enable recipient banks to better estimate the distribution of remittances and identify emerging trends that would be of use in devising policies to enhance remittances, the report indicated.

Departures for foreign employment declined sharply by 73.6 per cent to 53,713 in 2020, from 203,087 in 2019 with the spread of the pandemic.

Workers’ remittances increased by 5.8 per cent, yearon-year, to US$7.1 billion in 2020 up from $ 6.7 billion in 2019, Central Bank data showed.

Unlike in a normal year, in 2020 much of these terminal employment benefits and accumulated savings of migrant workers had been remitted through formal channels.

The reason for the increase in remittances was the diversion of informal remittances towards formal channels, R M N Jeewantha, Deputy General Manager ( International, Treasury and Investment) of Bank of Ceylon said.

Migrant workers have been compelled to halt remittances through illegal networks as their movements were restricted in the COVID-19 crisis, he added.

Under these systems cash does not cross borders, relying on retail establishments to collect remittances overseas for pay out in Sri Lanka through money already in the country.