UAE remittances decline due to slow down in employment
Dubai - The remittances fell from Dh87.92 billion in H1 2018 to Dh80.96 billion in the corresponding period this year.
Remittances from the UAE fell nearly eight per cent in the first-half of 2019 as both the quarters saw a decline due to a slowdown in employment, official data showed.
Central Bank data revealed that remittances fell from Dh87.92 billion in H1 2018 to Dh80.96 billion in the corresponding period this year. First-quarter remittances fell from Dh43.5 billion to Dh38.4 billion while second-quarter saw remittance declining from Dh44.42 billion to Dh42.55 billion.
"The annual growth rate of outward personal remittances during April-June 2019 was recorded at negative 4.2 per cent, a significant reduction compared to the growth for the same period in 2018 of 8.8 per cent. The slowdown in outward personal remittances is in line with the slowdown in employment," The Central Bank said.
A total of Dh33.046 billion thereof were transferred through money exchange companies and the rest from the banks operating in the country.
The highest destination country for outward personal remittances during April-June 2019 was India at 37.2 per cent. This high share is in accordance with the significant share of expats from India working in the UAE.
According to the latest UAE population statistics published by the Global Media Insight, 59.5 per cent of the expat population in the UAE originate from South Asian countries, and expats from India account for 27.5 per cent of the total expat population in the UAE.
Among the major markets, remittances to India accounted for Dh15.8 billion of the total, followed by Dh4.4 billion or 10.5 per cent to Pakistan, Dh3 billion to Philippines, Dh2.7 billion to Egypt, Dh1.6 billion to the UK and Dh1.57 billion to Bangladesh.Rajiv Raipancholia, CEO and managing director of Orient Exchange, said there was an increase in the number of transactions over the last two months after Indian rupee suddenly depreciated. "In the past few days, transactions and volume increased as people started to remit their savings."
Commenting on the outlook for the second-half of 2019, Raipancholia sees growth in outward remittances but it largely depends on how the Asian currencies behave against the US dollar and the UAE dirham. "We believe the second-half will be positive for remittances. If not growth, at least the remittances will be flat. If Asian currencies continue to depreciate, we can expect growth. but if they appreciate, there will be flat growth," he told Khaleej Times in an interview.
Raipancholia believes that the Indian rupee is at a good level now and market fundamental suggest further deprecation of the currency.