Money transfers to spike in November, December

Remittance flows from the UAE are expected to surge in November and December, as the country’s expatriate population celebrates the holidays.

Indians will be observing Diwali in November. The same expatriate community, along with the predominantly Roman Catholic Filipinos in the UAE, will also celebrate Christmas in December.

The two festivals, aside from Eid, Onam, New Year and Easter, and the strengthening of the US dollar, are considered bellwethers for remittances.

Money transfer operators contacted by Gulf News said they are expecting fund transfers out of the UAE to go up by 8 to 15 per cent during the remainder of the year.

The World Bank earlier estimated that global remittances to developing countries, including India and the Philippines, will go up by 6.3 per cent this year to $414 billion (Dh1.5 billion). A huge proportion of the amount will come from Indian and Filipino migrant workers.

Sudhesh Giriyan, vice president and business head at Xpress Money, said they are expecting to see a 10 to 15 per cent rise in remittances in the next two months.

He said money transfers normally fluctuate based on a number of factors, but they usually peak around festive periods, when it is customary for migrant workers to bring some financial cheer to their families and relatives back home rather than invest their earnings.

“Remittance flow depends on a lot of factors. Excluding regular remittances for family maintenance, festivities and seasonal commitments are among the key elements that spike up the volumes,” said Giriyan.

“In the case of India, remittances rise in November and December since the country is in the grip of a festive season during the period including Diwali and Christmas. In the case of remittances to the Philippines, the high points are during Christmas and New Year [as well as Easter],” he added.

UAE Exchange also expects remittance flows to increase by 8 to 10 per cent in the next two months. For the first half of the year, outward remittances from the country through UAE Exchange group hit $7.3 billion. The value of annual remittances through the group is pegged at around $13.3 billion.

“Festival season spikes remittances. Normally, the second half of the year witnesses increased volume as compared to the first because of the festivals,” said Promoth Manghat, UAE Exchange vice president for global operations.

Sobia Rahman, Western Union vice president for Pakistan, Afghanistan and the Gulf, agreed that remittance flows follow seasonal patterns.

“In the past, we have seen remittances from the UAE increase during the holidays and we are hopeful that we will have the same experience this year,” said Rahman.

She noted that majority of the residents who remit money (96 per cent) do it for specific purposes, with education being the first reason (45 per cent), emergency the second most common (43 per cent), followed by gifting (38 per cent).

“Emergencies aside, people know exactly when they have to send large amounts back home, with back to school season being one and the holidays being another predictable reason to send money,” she added.