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Remittances from the UAE to traditional markets such as the Indian subcontinent and Africa will see very healthy double-digit growth in 2022 as the dirham appreciates against foreign currencies.
Qatar has also emerged as the main recipient of remittances from the UAE this year, growing by as much as 40 percent, thanks to the ongoing FIFA World Cup, exchange officials said.
A strengthening of the UAE currency against Asian currencies, increased job creation as the economy recovers post-pandemic, Expo 2020 Dubai, foreign direct investment and growth in different industries are some of the main factors leading to an increase in remittances in 2022.
The Pakistani rupee has fallen about 21 percent against the UAE dirham in the past year, from around 48 to just over 61, according to Xe.com. The Indian currency also slipped from 20.6 in December 2021 to 22.4 in December 2022. Likewise, the Bangladeshi taka, Egyptian pound and Philippine peso have also weakened against the UAE currency over the past year. When the currency weakens against the UAE dirham, expats in the UAE tend to send more money, cashing in at a better exchange rate.
“The UAE benefits from a vibrant private sector, supported by sweeping reforms and a labor market that is attractive to the best talent. In addition, the industry as a whole is already cashing in on the benefits of the 2022 FIFA World Cup. Currency depreciation aside Plays a vital role throughout the year to allow expatriates to send more money. The industry as a whole is expected to see healthy double-digit growth in remittances,” said Hasan Fardan Al Fardan, CEO of Al Fardan Exchange.
According to the World Bank, outward remittances from the UAE will total US$47.54 billion (AED174.5 billion) in 2021, compared to US$43.34 billion the previous year, an increase of 9.7%.
Rashed Ali Al Ansari, CEO of Al Ansari Exchange, said their remittances have increased this year due to the devaluation of several currencies against the US dollar.
“We expect, in line with World Bank forecasts, that personal outward remittances will increase by 5% over last year, ending on a high note. The weakening of several currencies and the strengthening of the UAE dirham provide expats with greater currency purchasing power , enabling them to repatriate more money to expand assets or pay down debt and mortgages,” Al Ansari said.
LuLu Exchange also sees 2022 as a “year of growth”.
“Our remittance business has grown significantly, with good growth in remittances to South East Asian corridors, particularly India, Pakistan and Sri Lanka. We have also seen an increase in remittances to African corridors, including North African countries such as Egypt,” said a LuLu Exchange spokesperson.
Where are remittances growing faster?
Pakistan, Nepal and Sri Lanka have seen faster growth in remittances from the UAE this year, mainly due to the currency depreciation of their respective currencies, the spokesperson said.
Al Fardan said that the remittance industry is contributing to the rapid growth and development of African, Arab and Single Euro Payments Area (Sepa) countries.
Al Ansari CEO added that remittances from the UAE have grown significantly in recent months.
“We have witnessed exponential growth in remittances to Qatar, which surged by 40% due to the FIFA World Cup, followed by Bangladesh with a 24% increase, Pakistan with a 22% increase and Pakistan with a 21% increase. %. Nepal,” Al Ansari added.
The other best-performing corridors in terms of the volume of outward personal remittances are the Philippines, India, Pakistan and Egypt.
“Remittances in the Philippines also saw an upturn due to the increase in the number of Overseas Filipino Workers (OFWs) in the country and fluctuations in the Philippine peso,” he concluded.
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