Remittances from the UAE have seen very healthy double-digit growth in 2022 to traditional markets such as the Indian subcontinent and Africa due to the dirham’s appreciation against foreign currencies.
Exchange houses officials say that Qatar also emerged as a major recipient of remittances from the Emirates this year, growing as high as 40 per cent, thanks to the ongoing Fifa World Cup.
The strengthening of the Emirati currency against its Asian peers, increase in job creation as the economy recovers after the pandemic, Expo 2020 Dubai, foreign direct investment and growth of diverse sectors were some of the main factors that contributed to the increase in remittances in 2022.
According to Xe.com, the Pakistani rupee has fallen by around 21 per cent in the past year from around 48 to over 61 against the UAE dirham. The Indian currency has also slipped from 20.6 in December 2021 to 22.4 in December 2022. Similarly, the Bangladeshi Taka, Egyptian pound and the Philippines peso have also weakened against the Emirati currencies in the past year. when currencies weaken against the UAE dirham, expatriates in the UAE tend to remit more funds to cash in on better exchange rates.
“The UAE is benefiting from a vibrant private sector, supported by comprehensive reforms and a labour market attractive to the best talent. Additionally, the overall industry is already encashing the benefits of the Fifa World Cup 2022. On top of that currency, devaluation plays a vital role throughout the year to send more money by the expats. The overall industry is projected to close with a healthy double-digit growth in terms of remittance,” said Hasan Fardan Al Fardan, CEO of Al Fardan Exchange.
According to the World Bank figures, outward remittances from the UAE totalled $47.54 billion (Dh174.5 billion) in 2021 as compared to $43.34 billion in the previous year, an increase of 9.7 per cent.
Rashed Ali Al Ansari, CEO of Al Ansari Exchange, said they witnessed an increase in remittances this year owing to the depreciation of several currencies against the US dollar.
“We expect that the volume of outward personal remittances would rise by five per cent compared to last year to end on a high note, in line with the projections of the World Bank. The weakening of several currencies and the strength of the UAE dirham have provided expats with a greater purchasing power for their money, allowing them to remit more home to expand assets or pay off their debts and mortgages,” Al Ansari said.
LuLu Exchange also sees 2022 as “a year of growth”.
“Our remittance business has witnessed a significant increase, with transfers to the Southeast Asian corridors, especially India, Pakistan and Sri Lanka witnessing good growth. We also saw increased remittances to the African corridor, including countries of North Africa like Egypt,” said LuLu Exchange spokesperson.
Where have remittances grown faster?
The spokesperson said Pakistan, Nepal and Sri Lanka have seen a faster increase in remittances from UAE this year, mainly on account of weakening currencies in their respective currencies.
Al Fardan said there’s a good pace and traction towards Africa, Arab and single euro payments area (Sepa) countries where the remittance industry is fostering accelerating growth.
Al Ansari CEO added that in recent months, remittances from the UAE have grown significantly.
“We witnessed an exponential growth in remittances to Qatar recording a 40 per cent spike owing to the Fifa World Cup, followed by a 24 per cent increase in remittances to Bangladesh, a 22 per cent rise in Pakistan, and a 21 per cent spike in Nepal,” added Al Ansari.
Other top-performing corridors in terms of volume of outward personal remittances were the Philippines, India, Pakistan and Egypt.
“Remittances to the Philippines have also witnessed an upturn due to the rising number of Overseas Filipino Workers (OFWs) in the country and the fluctuation of the Philippine Peso,” he concluded.
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