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Remittances up 5 to 6%, say money transfer firms

Dubai: Money-transfer operators yesterday reported a 5 to 6 per cent growth in outbound remittances from the UAE last year as expatriates took advantage of exchange rate fluctuations and the recovering economy put more money into people’s pockets.

Officials from remittance providers said a return in confidence in the UAE economy, bolstered by Dubai’s successful bid to host Expo 2020, had helped drive remittance outflows in 2013, with the bulk of cash reaching Asian countries.

UAE Exchange, which has 700 branches in 31 countries, said that it remitted around $14 billion from the UAE in 2013, up 6 per cent from $13.2 billion in 2012. Al Fardan Exchange reported that overall remittances from the UAE went up by 5 per cent last year, while Wall Street Exchange said it witnessed a “double-digit growth.”

“One of the major reasons for increase in remittances in 2013 was exchange rate fluctuations, especially the Indian rupees rate that encouraged many non-resident Indians (NRI) to send additional remittances to gain from the rates,” said Sultan Bin Kharsham, managing director of Wall Street Exchange Co.

“Also many banks in India increased their interest rates on fixed deposits to encourage NRIs to send money back home.”

Osama Al Rahma, CEO of Al Fardan Exchange and chairman of the Foreign Exchange and Remittance Group (Ferg), said expatriate migration to the UAE has also increased, which contributed to the growth in money transfers.

“There’s a lot of positive developments in the UAE. The announcement of the Expo 2020 created more confidence and encouraged many companies to announce real estate projects. These in turn are encouraging more people to come to the UAE for work,” Al Rahma told Gulf News in a phone interview.

“Besides, in the second half of last year, there were foreign exchange fluctuations. The Indian rupee, for example, fell against the dirham and this allowed many people to maximise their remittance amount,” he added.

The Indian rupee has significantly lost its value against the dirham, trading around 17.97 to the UAE currency last September, compared with 11.99 to a dirham in August 2011. The Philippine peso has also weakened, trading a little over 12 to 1 dirham yesterday, from a little over 11 to 1 dirham in 2011.

Promoth Manghat, vice president for global operations at UAE Exchange, said the top recipient of remittances from the UAE was India, followed by Bangladesh, Pakistan, Philippines, Sri Lanka, Nepal, Egypt, Indonesia, Jordan and Thailand.

“The continuing infrastructure development and economic growth in the UAE would in turn lead to higher remittance volumes from UAE in 2014,” Manghat said in a press statement.

The UAE is home to over 5 million expatriate workers, which is about a third of the total 15 million migrant population in the Gulf Cooperation Council (GCC) countries.