UAE - Exchange houses in the UAE are projecting a significantly higher growth in remittances during the holy month of Ramadan as well as the whole of this year, helped by the weakening of the Asian currencies and an increase in the expat population in the country.

Senior officials told Khaleej Times that remittances are mainly growing through digital channels. The flow of remittances, a lifeline for families of millions of expatriate workers, usually peaks during the Eid seasons when workers remit more to their families.

“Considering the recent trend of weakening of Asian and other emerging market currencies, and due to the festive season of Eid Al Fitr, we are expecting overall seven per cent growth in remittance numbers during the next one month. We expect a growth of approximately 10 per cent in key corridors like Bangladesh, Indonesia, Sri Lanka, Pakistan, and some African countries due to the festive season and volatility in these corridors,” said a LuLu Exchange spokesperson.

For the full year, the exchange anticipates double-digit growth. “We are expecting approximately 10 to 12 per cent remittance growth in the year 2023 as compared to the year 2022.”

Hasan Fardan Al Fardan, CEO of Al Fardan Exchange, also forecasts strong remittance growth during the holy month of Ramadan.

“Major corridors such as India, Pakistan, Egypt and Bangladesh are likely to see likely see higher growth,” said Al Fardan, adding that remittances will see stronger growth in 2023 versus last year.

Dubai-based Al Ansari Exchange, which recently went public and raised Dh773 million through the IPO, said its digital channels recorded more than 30 per cent growth in remittance transactions in the first quarter of 2023 as compared to the same period last year.

In March 2023, the company's digital channels achieved an unprecedented number of transactions, reaching 340,000 in total.

Rashed A. Al Ansari, Group CEO of Al Ansari Financial Services, said the firm will continue to invest in technology and innovation to enhance provide the best-in-class service to them.

According to a survey released by digital payment company Visa, around 70 per cent of UAE residents are turning to digital apps to send and receive funds internationally, in comparison to 53 per cent of consumers globally.

The survey further revealed that around 63 per cent of people send remittances from the physical location.

Interestingly, 11 per cent of people remit money by giving money to another person who is travelling to their home country and eight per cent remit by cheques and money orders by mail and nine per cent send cash by mail.

“This new research shows the rapid acceleration of digital payments in the UAE, which is among the largest source markets of remittances globally. However, the industry needs to continue further streamlining remittances within reach of more expatriates and their families who rely on these lifeline payments to do everything from pay for food, education, or even unforeseen medical costs,” said Salima Gutieva, vice-president and country manager at Visa, UAE.

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