UAE remittances see over 10% increase as Indian and Pakistani rupees slide in August

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Remittances from UAE expatriates to India, Pakistan and the Philippines have surged in August as their respective local currencies saw a significant dip against the dirham this month.

“There has been a significant increase of nearly 10 per cent in remittances to India – this is a notable uptick in the amount of money being sent the UAE. Remittances to Pakistan have also seen an equal increase (in August) – signifying a growth in the inflow of funds to Pakistan. Remittances to the Philippines, meanwhile, have shown a higher than 10 per cent increase,” a spokesperson from LuLu Exchange told Khaleej Times on Thursday.

The spokesperson added it is now the best time for expatriates to send money. “The examination of the remittance landscape and economic conditions suggests that the current market conditions are conducive to achieving good value for remitters,” he noted.

“Remitting money to India, Pakistan, and the Philippines from the UAE can be considered a favourable decision, especially when considering the comprehensive analysis of remittance trends and economic factors,” he reiterated.

Likely to surge

Remittances from the UAE are likely to surge as Indian and Pakistani rupees as well as the Philippine peso remain under pressure due to rising US treasury yields and a weaker Chinese yuan.

Vijay Valecha, chief investment officer at Century Financial, explained: “The Indian rupee (for instance) has declined over 1.2 percent (against the US dollar) from its late-July high to a five-month low (in August) at 83 rupees per dollar – the first time in nearly ten months. A stronger dollar, rising US treasury yields and a weaker Chinese yuan contributed to the rupee’s descent.”

“Historically, a slump in the rupee relative to the USD and AED is inadvertently followed by a surge in remittances to India by the NRI (overseas Indians/ non-resident Indians) community. This is because a weaker rupee allows NRIs to send more money to India while spending the same amount in their host nations,” Valecha underscored, adding the Indian rupee is likely to remain under pressure in the near-term due to several reasons.

Send now

Some financial experts forecast the three Asian currencies will slide further in the coming weeks, giving expatriates a short-term gain when they hold off their remittances.

Dubai-based Filipino financial advisor Susan Francisco, however, disagrees, noting: “Yes, Indian and Pakistani rupees and the Philippine peso might slide further but people in our home countries are also in need of money as prices of commodities in our local markets are going up. Holding remittance now will put a strain on their expenses.”

Francisco added the higher value for dirhams is beneficial for expatriates and they can take advantage of the situation by saving the extra money they would gain. She explained: “Let’s say before you need D3,335 to send P50,00 to your family back home in the Philippines, Now, you need only Dh3,246 to send the same amount of money and the almost Dh90 you saved can be added to your savings account.”