GCC expatriates are being advised to consider the advantageous rates of exchange, as the plunge in global markets provides a window of opportunity to send money back home.
“It is a great time to be transferring money back home for expats in Dubai; the current levels of exchange are the best levels in well over a year to send money back to the UK, and the best time to send money back to Europe since 2006,” Chris Canning, an account manager for UK-based FirstRate FX told Arabian Business.
“As a result several expats are using this opportunity to ‘lock-in’ the current levels of exchange for their monthly transfers out of Dubai.”
Although the region’s biggest remittances firms refrained from attributing any new growth in transfers to the recent turmoil in the markets, it certainly seems that remittances from the UAE to other regions are back on the increase after a 10-15 percent drop last year.
“We have experienced a rise in the remittance volume mainly due to the approaching holiday season coupled with the strengthening of the US dollar, which is adding to its purchasing power as well as that of the dirham,” said Al Ansari Exchange managing director Mohammad Al Ansari.
“This is encouraging residents to remit money, especially to countries where the currency is not pegged to the US dollar. In 2009, remittance volume here dropped, but with approxmiately 83,000 money transfers being processed daily in the UAE, we are confident that this number will rise this year.”
Al Ansari indicated that the UAE had experienced an increase in remittances to most countries worldwide, but added that the biggest trends had materialised in the countries within the Indian subcontinent, the Middle East and Far East.
“The UAE has also emerged as one of the cheapest countries to send money from, thanks to the strong competition in the market and high remittance volumes, while on the other hand, the UK and Russia posted the biggest decline in the last six months as far as transfer costs are concerned,” the director added.
Global giant Western Union also pinpointed India as a key market due to the significant Indian population currently employed in the Gulf.
“Should the Indian rupee continue to slide, this could spur more remittances to the subcontinent. However currency fluctuations are only one of several factors that shape the volume of remittances,” said Sobia Raman, Western Union’s regional VP for Pakistan, Afghanistan and the Gulf.
“As more projects in industries such as construction, oil & gas and general infrastructure begin to develop, and job vacancies increase, we expect to see the volume of remittances rise in tandem.”
But Moneygram International regional director Richard Meredith said that he had not seen a noticeable increase in transaction volumes out of the UAE in recent weeks.
“We have been seeing consistent growth of Saudi Arabia, but that should not be attributed to what is happening right now with the global markets,” he said.
According to World Bank figures for 2009, there was $420 billion worth of worldwide money transfers, out of which $317 billion went to developing nations. The agency has predicted that worldwide remittance volumes will remain flat this year, but will increase by four percent in 2011.
The UAE is home to 110 exchange companies, with over 550 branches.