Dubai: Money flows from the UAE continued to increase in 2016 despite weak economic growth and low oil prices, transfer operators reported.
According to UAE Exchange and Xpress Money, the volume of outgoing cash transfers went up by 10 per cent to 12 per cent last year compared to 2015, with Arab countries also registering an increase in received funds.
Operators would not disclose the total value of money transferred from the UAE, although previous World Bank estimates indicated that the annual figure could reach Dh70 billion in one year, one of the largest in the world.
India emerged as the number one beneficiary of financial flows in 2016, as remittances saw significant spikes during special occasions and after the Indian government took out of circulation some old rupee notes.
The strengthening of the US dollar against global currencies last year also aided the rise in remittance transactions.
“Though the slump in oil prices slowed down the remittances flow a bit, currency depreciation due to volatility in global currencies triggered remittances, as most of the remittance destination currencies depreciated during the year,” Promoth Manghat, CEO of UAE Exchange, told Gulf News.
“In spite of all the hurdles, remittance continued to be steady. A growth of 10 per cent was seen in our remittance volume in 2016 when compared to the previous year.” “[As for India] remittances spike during festivals and after demonetisation, but overall, we witnessed a 6 per cent increase in 2016 vis-à-vis 2015.”
A number of currencies, including the Indian rupee, UK sterling, euro and the Philippine peso tumbled against the greenback last year. With the UAE dirham pegged to the dollar, a rise in the American currency means an increase in remittance power of expatriates in UAE.
Xpress Money reported that it recorded a 12 per cent increase in outgoing remittances last year compared to 2015. Both Xpress Money and UAE Exchange said that the top beneficiary of money transfers last year was India, followed by Pakistan, Philippines and Bangladesh.
Xpress Money also noted robust cash transfers to the Levant region, including Jordan, Egypt and Lebanon. In the African continent, Kenya, Nigeria and Ghana emerged as the leading destinations of remittances.
“Despite market unpredictability, key developments such as Brexit and the US elections proved to be beneficial for the remittance industry. Through 2016, the devaluation of major global currencies including the British pound, Indian rupee, Mexican peso and Egyptian pound spurred remittances to those countries as consumers took advantage of favourable rates to send money home,” said Sudhesh Giriyan, Xpress Money COO.
“Our growth was also powered by strong customer loyalty, repeat business and a very strong network of agent partners across all our core markets.”
The company predicted that remittances will continue to grow this year. According to the World Bank data, the UAE is the third-largest outward remittance market in the world. As market activity picks up in the run up to Expo 2020, the UAE is expected to maintain its position as one of the world’s biggest sources of remittances.