(MENAFN - Gulf Times) Sri Lankan workers in the Middle East sent back fewer dollars in August, the sharpest monthly drop yet owing to adverse economic and geopolitical conditions in the region, its central bank said yesterday.
Remittances declined by a record 10% to $556.6mn, compared with $618.3mn in August last year, the bank said in areport.
About 2mn Sri Lankans or 10% of the population work overseas, mostly in the Middle East and in construction and hospitality or as household maids.
Money they send back to families is the main source of the country's foreign exchange and is used to finance nearly 80% of its trade deficit.
Remittances in the first eight months of the year also fell by 6.3% to $4.5bn, the bank said, the biggest drop ever seen and significantly more than 2015's dip of 0.53%.
Central Bank Governor Indrajit Coomaraswamy said recently the decline in remittances was disturbing, while pinning his hopes on growth in the country's small export
Sri Lanka has been an exporter of skilled and unskilled labour for decades.
The fall in remittances is a double blow for the country, which is simultaneously having to shell out more for foreign workers.
That demand comes from a labour shortage at home in sectors such as construction and manufacturing, which have picked up since the decades-long Tamil separatist war ended in May 2009.