Remittances from the UAE will increase substantially during Ramadan, especially on the digital front, according to officials of the foreign exchange and remittance sector.
They believe that the weakening of the Indian rupee, which hit an eight-month low against the dirham, will also play a key role in the growth of remittances during the Holy month.
Usually, remittances from the UAE, particularly those being sent to Islamic countries, increase during Ramadan and the holiday seasons.
“We’ll see this trend continue this year. The indicators are pointing towards positive and robust remittance activities. The transactions are expected to peak in the week ahead of Eid-Al-Fitr, when residents start transferring money to their families and loved ones in their home countries. We forecast the growth trend during Ramadan and Eid Al-Fitr to reach around five per cent and 10 per cent, respectively,” said Rashed A. Al Ansari, chief executive officer (CEO) of Al Ansari Exchange.
Al Ansari is bullish about the future growth in remittances, thanks to the easing of movement and travel restrictions, rapid deployment of the Covid-19 vaccines, spending rate returning to pre-pandemic level, economic stimulus packages and Expo 2020 Dubai.
Adeeb Ahamed, managing director of LuLu Financial Group, said business would often pick up during Ramadan and then gain momentum in days ahead of Eid Al Fitr. “We also foresee an increase in trade-based remittances in this period, which will extend well beyond the second quarter. In line with these expectations, we are building a healthy proposition around our focus areas of trade remittances and corporate and high net worth individuals, while continuing to grow our core strength of cross-border payments.”
Lulu Financial expects remittances to India, Pakistan, Egypt and Morocco will witness the highest flow in the coming weeks.
Hasan Al Fardan, CEO of Al Fardan Exchange, expects a double-digit growth in remittances during Ramadan, with the best performing corridors being India, Pakistan, Egypt, Bangladesh and Indonesia.
“We also believe that the current Indian rupee fluctuation will also play a role in obtaining good growth in volume performance for the Indian corridor during Ramadan,” he added.
Al Ansari said more and more customers are now using safe, reliable, and convenient smart applications to transfer funds.
“There are numerous reasons that make digital channels highly attractive. They not only offer competitive fees, but they also provide additional features such as transaction tracker, among others … Transactions made via ‘Al Ansari Exchange Mobile App’ increased by more than 100 per cent in 2020, as compared to 2019,” he added.