(MENAFN- Khaleej Times) Fluctuations in major currencies provided expats in the UAE with favourable rates when it came to sending money back home to their families, industry experts said.
"We have seen various currencies depreciate through the year, and that has proved beneficial for expats remitting money," said Sudhesh Giriyan, COO of Xpress Money.
Giriyan elaborated that the currency fluctuations were brought about by economic and political news that gave expats the opportunity to send money home at favourable rates - such as when the British pound dipped after the Brexit referendum result, or the present situation of the Indian rupee.
"We've seen our remittance business hold steady, despite global headwinds," he revealed. "We are currently seeing a strong dollar post the US election results in anticipation of an expansionary fiscal policy. This pushes the GCC currencies higher due to the dollar peg, and might result in favourable rates for expats sending money home. We've already been seeing an increase in the volumes of transactions in response to these favourable currency fluctuations."
Meanwhile, the World Bank also estimates that remittances to Low and Middle Income Countries (LMICs) will edge up by 0.8 per cent in 2016.
"So, while macro challenges persist, we're seeing remittances prove robust in the face of them," Giriyan noted.
Promoth Manghat, chief executive officer of UAE Exchange Group, noted that the most popular and major currency pairs are the euro/US dollar, US dollar/Japanese yen, and the British pound/US dollar. 2016 saw these currencies opening at the rate of 1.085, 120.13, and 1.473 respectively.
But, by the end of an eleven-month period - as on November 28, 2016 - these currencies closed at the rate of 1.061 for the euro/US dollar, 111.93 for the US dollar/Japanese yen, and 1.241 for the British pound/US dollar due to the various socio-economic-political factors, resulting in significant fluctuation.
According to Manghat, if the US Federal Reserve hikes the interest rates, the other currencies are bound to go down further.
"Meanwhile the US dollar/Indian rupee, US dollar/Pakistan rupee, and the US dollar/Bangladesh taka are the major currency pairs for us as a remittance brand," he added. "In the beginning of 2016, these currencies opened at 66.57, 104.84, and 78.45 respectively. By the end of an eleven-month period - as on November 28 - these currencies closed at the rate of 68.47, 104.80 and 78.70 respectively."
Manghat also noted that the currency volatility spiked remittances, especially to Europe and South Asian countries. The weaker sterling impacted remittances positively, recording an eight-fold increase. He further revealed that a 15 per cent growth in remittances from the UAE to India month-on-month was observed since the Indian rupee depreciated.
"Demonetisation of certain Indian rupee denominations brought scarcity of hard cash in the Indian market, increasing remittances to bank accounts in India. Festivals like Ramadan, Onam, and Diwali also saw an increase in remittances to India," Manghat said. "Also, when the peso depreciated during the August to September period, we saw a 22 per cent surge in remittances to the Philippines."
He added: "Meanwhile, we have witnessed an overall growth of eight per cent in the last nine months. If US dollar continues to maintain its strength, the dollar-pegged UAE dirham will provide favourable exchange rates for expatriates as their home currencies are likely to depreciate further. With Christmas and New Year around the corner, remittances to South Asian nations are set to rise."
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