The Central Bank has admitted an increase in grey market forex activity despite multiple measures to curb it, including the pursuit of a realistic exchange rate.

The CBSL’s admission was contained in the release of external sector performance. 

It said workers’ remittances moderated in June 2022, compared to May 2022, reflecting “an increase of grey market activity of foreign exchange transactions”.

Workers’ remittances in June amounted to $ 274 million in comparison to $ 304 million in May and $ 478 million in June last year. Workers’ remittances in the first half were down by 51.6% to $ 1.6 billion.

It said total departures for foreign employment were recorded at 26,944 in June, a notable increase compared to 22,194 during May 2022. Total departures of foreign employment consisted of unskilled (9,317), skilled (7,977) and domestic aid (6,556) categories.

Total departures for foreign employment during January-June 2022 were recorded at 140,701, compared to 30,757 in the corresponding period of the previous year and 117,952 in the year 2021.

CBSL also said stable level of exchange rate continued to prevail in the market throughout June 2022, following the introduction of daily permissible band in May 2022. 

From 13 May 2022 to date, the rupee recorded a marginal depreciation against the dollar, despite recording a depreciation of 44.4% against the dollar during the year up to 29 July 2022. Reflecting cross-currency movements, the rupee depreciated against the euro, the pound sterling, the Japanese yen, the Australian dollar, and the Indian rupee during the year up to 29 July 2022.

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