08 September 2010

Sri Lanka Remittances Rise to $3.8bn with End of Civil War

07th September 2010, www.bloomberg.com, By Anusha Ondaatjie

Remittances sent home by Sri Lankan nationals overseas may rise to a record $3.8 billion in 2010, a central bank official said, adding that policy makers will ensure stability of the currency as the flows increase.

“We are still getting sustained inflows from the Middle East and people are sending more money to their families in the north and east since the war ended,” Swarna Gunaratne, acting director of the central bank’s economic research department, said in a telephone interview today.

Sri Lankan troops defeated the Liberation Tigers of Tamil Eelam in 2009, freeing areas in the north and east which were controlled by the separatists for 26 years. The Central Bank of Sri Lanka would “purchase excess foreign exchange in the market” and keep the Sri Lankan rupee stable, Gunaratne said.

Spending on imports will exhaust some dollar inflows and prevent a sharp gain in the rupee, she said.

The Sri Lankan rupee, which has climbed about 2.3 percent since the war ended, was at 112.55 to the dollar at 1:20 p.m. in Colombo, according to Bloomberg data.

To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net

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