The Central Bank of Sri Lanka (CBSL) has devalued the currency, the Sri Lankan rupee, by 15% to shore up foreign reserves and to attract migrant worker remittances, but bankers say the move will not make a significant difference to the status quo. Instead, migrant workers are shunning the formal banking system due to the low exchange rate compared to the informal channels offering them at least 30% more.
As of March 7, the banking regulator raised the exchange rate to SLRs230 per US dollar, from SLRs203 held since last October. Analysts say this move is late in coming, as the new rate is not reflective of the economic realities. They also say that the exchange rate is still low compared to the grey market offered rate of SLRs270 per dollar, which can sometimes go up to SLRs300.
