Expatriates residing in the UAE have seized a unique opportunity in August as remittances to India, Pakistan, and the Philippines experience a significant uptick. The surge in remittances coincides with a substantial depreciation of the local currencies of these nations against the UAE dirham.
According to a spokesperson from LuLu Exchange, remittances to India have witnessed a substantial increase of nearly 10 percent, marking a notable rise in the volume of money being sent from the UAE. A parallel increase in remittances has been observed for Pakistan, indicating a heightened inflow of funds to the country. Moreover, remittances to the Philippines have experienced an even higher than 10 percent growth during this period.
This surge in remittances has led experts to suggest that the current circumstances present an opportune time for expatriates to send money back to their home countries. The spokesperson from LuLu Exchange highlighted the favorable market conditions and economic factors contributing to this scenario, indicating that remitting funds to these nations from the UAE can be a strategically advantageous decision.
The trend is expected to continue as the Indian and Pakistani rupees, as well as the Philippine peso, remain under pressure due to increased US treasury yields and a weaker Chinese yuan. The depreciation of these currencies against the USD and AED has historically prompted a surge in remittances, as a weaker currency enables expatriates to send more money home while spending the same amount in their host nation.
While some financial experts predict further declines in these Asian currencies in the coming weeks, offering a short-term advantage to those who delay their remittances, opinions are divided. Dubai-based Filipino financial advisor Susan Francisco argues that the current situation also has an impact on the families receiving remittances, as rising commodity prices in the home countries place a strain on their expenses.
Nevertheless, the higher value of the dirham against these currencies provides a savings opportunity for expatriates. The increased purchasing power of the dirham allows them to send more money back home while maintaining a stable expenditure in the UAE. This advantageous dynamic enables expatriates to strategically manage their finances and potentially boost their savings amid fluctuating currency values.