Data Releases & Key Statements during the Month

Booming Gulf economies attract Bangladeshi workers: USD7.1 billion remittances received this fiscal

The Central Bank of Bangladesh reported that remittances received during the first 11 months (July-May) of this fiscal year grew by 31% to a high of USD7.1 billion compared to USD5.4 billion recorded in the same period last fiscal. However, the remittances received during May fell to USD732 million from USD781 million in April.

Inward remittances are the second largest source of foreign exchange after revenues from the export of ready-made garments, which stood at USD9 billion in 2006-07 fiscal year. The Central Bank officials expect the total remittances to cross USD10 billion over the next year, thereby enhancing the foreign exchange position of the country.

Philippine remittance growth accelerates on more jobs

The Central Bank of Philippines in a statement said that the remittances sent by Filipino expatriates in April 2008 rose by 18.4% to USD1.41 billion compared to last year. This rapid increase in remittances reflects a rise in Filipinos finding housekeeping, medical and engineering jobs overseas. The Central Bank further added that the number of Filipinos going to work abroad increased by 14% to 399,638 in the first four months of 2008 compared to the same period last year.

The Central Bank of Philippines in a statement said that the remittances sent by Filipino expatriates in April 2008 rose by 18.4% to USD1.41 billion compared to last year. This rapid increase in remittances reflects a rise in Filipinos finding housekeeping, medical and engineering jobs overseas. The Central Bank further added that the number of Filipinos going to work abroad increased by 14% to 399,638 in the first four months of 2008 compared to the same period last year.

The Asian Development Bank in March said that it expects remittances from one in 10 Overseas Filipino Workers to rise in 2008 by only half of 13.2% recorded in 2007 due to cooling of global economy.

Strengthening “parallel” market in Zimbabwe

According to the International Association of Money Transfer Networks (IAMTN) approximately USD1.5 million is received by Zimbabwe as remittances. Most remittance service providers, except Western Union operate based on market determined exchange rate rather than Government declared exchange rate, which is 50% of the market rate i.e. they operate on the 'parallel' market.

The shortage of foreign exchange has forced the Government to informally permit the functioning of this ‘parallel’ market. The conventional money transfer channels have performed badly due to large number of customers shifting to unregulated channels. This situation is expected to continue till normalcy is restored in Zimbabwe.

IMS projects 884 million mobile banking and payment users by 2012

According to reports from IMS Research, engaged in providing market research for global electronics industry, the number of users of contact-less mobile payments, mobile banking and over the air (OTA) transactions is expected to rise to 884 million in 2012. IMS Research estimates that 62 billion transactions would be completed in 2012.

The Research Director, John Devlin said “The early seeds sown by a handful of companies have started to grow and now serious backing is being provided by both the financial and operator communities. Service growth to date is already strong and taking off across a number of markets in Asia, the Middle East and Africa. When coupled with the growing volume of rollouts and service launches in Europe and the Americas, the number of new users nearly tripled in 2007.”

Long term outlook for the dollar

According to bankers and analysts, depreciation of the US dollar is expected to continue for the next three years, thereby affecting the ability of foreign workers in the UAE to send money home. The volume of remittances in a year was USD20 billion from the Gulf Cooperation Council (GCC) countries, which is about 12.5% of the total financial flows related to immigration. In the UAE and other Gulf countries, the foreign workers also have to bear the impact of high inflation further affecting their capacity to send remittances.

BNP Paribas in its recent report on ‘Stagflation and currencies’, says “The longterm structural bearish factors for the US dollar are set to remain in place with the large current account deficit, though the US dollar performance in 2008 is to be more mixed.” The report further states that factors weakening the US dollar over long-term remain, since the US has huge current account deficit. It however expects mixed performance of the US dollar in 2008 due to spread of slowdown of the US economy to other economies.