Wait or remit? UAE expats rush to send money to Pakistan, Philippines, India as currencies plunge to all-time low

Currency exchange centres and international money transfer services are recording a noticeable spike in remittances, as UAE customers take advantage of the surge in dollar value.

Al Fardan Exchange has said most currency transactions have seen double-digit growth compared to last month.

For instance, EUR transactions have seen a month-on-month increase of 34 per cent in terms of volume, and GBP volume has increased by 13 per cent; similar is the case with other currencies as well, explained Hasan Fardan Al Fardan, CEO of Al Fardan Exchange LLC.

“Most expatriates, especially Asians and Europeans residing in the UAE, are taking advantage of a weaker currency in their home countries, which has resulted in a noticeable spike in remittances,” Al Fardan said.

Further, currencies are expected to remain volatile in the coming months, and most UAE expatriates are likely to take the benefit of every dip in their home country's currency against the US dollar, he suggested.

The US Dollar Index, which measures the US dollar against a basket of currencies, has strengthened by 15 per cent since the beginning of the year, the Economist Intelligence Unit has said.

“The USD has strengthened against all major currencies, and since the dirham is pegged to the USD, the same dirham amount now has more value against foreign non-USD currencies,” Al Fardan stated.

Similarly, a spokesperson for Lulu International Exchange said: “With the continuous rise in interest rates in the US, we have witnessed an increase in outward remittances, both in terms of volume and transaction count.”

The spokesperson said this is primarily because any rate increase in the US attracts foreign capital investment into the UAE. Moreover, the company is witnessing double-digit growth in US Dollar remittances.

“We have seen a growth in remittance counts and volumes going to Asia (Pakistan, Philippines, India…). We have also observed more European remittances from expatriates and investors taking advantage of the low level of the EUR,” they added. “There is a big demand on EUR FCY (cash) as tourists are taking advantage of the low value of the EUR, making Europe an attractive destination,” the spokesperson added.

“Due to current global US dollar strength, the European currency is continuing to depreciate against the Dollar. Until the present trend continues, we expect that the remittance volume in the European corridor will witness continued growth in both volume and count,” they predicted.

Exchanges said on Friday that outward remittance volumes have increased for retail and corporate customers.

“However, as there is a possibility for further increase in interest rate in future, we are yet to see these outward remittances peak as some customers may put their remittances on hold for some time,” the Lulu spokesperson stated.

The exchange home also said it had witnessed increased remittance volumes across all major nationalities. “However, people of USA, UK, China, Hong Kong and Japan nationalities are major contributors in volumes,” they added.

According to statistics released by the World Bank in May 2022, remittance inflows to Europe and Central Asia increased by 7.8 per cent in 2021, reaching historic highs of $74 billion.

Moreover, economies in emerging market countries have seen a significant increase in overseas workers sending money home this year, according to research by ACE Money Transfer, an online remittance provider.

Data compiled by ACE Money Transfer shows that several major emerging market economies have seen a significant rise in expatriates' money transfers, known as remittances. This includes countries like Bangladesh, which has seen a 12 per cent increase in remittances on average over the past year, Pakistan (8 per cent) and the Philippines (3 per cent).

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