The World Bank predicts a 20% decline in global remittances due to the economic crisis induced by the Coronavirus pandemic. Remittances could fall from $714 billion in 2019 to $572 billion in 2020, the World Bank report said.
The projection of the sharpest decline in recent history is primarily due to a fall in earnings due to loss of employment during an economic crisis in the major host countries, according to the Migration and Development Brief, that covers migration and remittances. The other additional factors are a crash in oil prices and an overall decline in the health of the migrant workers who are vulnerable to the virus due to the living conditions.
In the past, remittances have been counter-cyclical, migrants would typically send money home, which provided a cushion for developing countries in times of crisis and hardship. As we have seen in the 2015 earthquake in Nepal and Kerala Floods in India. This time, it is different, this is a global issue. Coronavirus pandemic has affected all countries and infected over 3 million people worldwide.
Protect the locals first
Major remittance sending host countries have implemented lockdowns, travel bans, and social distancing in an effort to control the spread of the virus. With businesses shut and travel restrictions in place, economic activities have been brought to a near standstill, prompting a huge spike in unemployment and overall economic decline in the host countries.
As the world braces itself for a recession, businesses are more likely to fire foreign workers before native-born workers. During the financial crisis of 2008, the average unemployment rate for foreign workers in the European Union jumped from 11.1 to 16.4%, significantly higher than that for native Europeans. By April 2020, 22 Million Americans had filed for unemployment in the United States.
Risk of contagion
In addition to lost earnings, migrants also face the risk of contagion due to the living conditions and health insurance coverage. In countries like Singapore and the Middle East, migrant workers live in cramped conditions, which has come to the spotlight in the relapse of Coronavirus.
More than 200,000 migrant workers from Asia were residing in a total of 43 dormitories in the country as per the report by the Guardian. Low-wage migrant workers accounted for at least 60% of the total infections in Singapore.
It is a similar story of lockdown in labor camps and dormitories for migrant workers in the Middle East countries.
Heavy impact in the low and middle-income countries
Studies have proven that remittances have lifted many vulnerable households in developing countries. Remittance also has shown higher spending on education, healthcare, and entrepreneurship. On a national level, remittances contribute significantly to its foreign currency reserve.
For some, as in the case of Nepal, remittances accounted for 30% of the total Gross Domestic Product last year. Nepal exports the highest number of overseas workers on a per capita basis in Asia.
In 2019, remittances to low and middle-income countries (LMICs) reached a record of $554 billion, which was higher than Foreign Direct Investment (FDI) in 2019. In 2020, remittance flows are projected to fall by 19.7% to $445 billion. By 2021, the World Bank estimates that remittances to LMICs will recover by 5.6% to $470 billion.
Remittances to South Asia are projected to decline by 22% to $109 billion in 2020. Overseas workers from countries like Nepal and the Philippines take out loans and spend years saving money, in order to find jobs abroad, to provide a better life for the families.
India was the top recipient of remittances with a total of 82 billion dollars in 2019. New prediction by the World Bank suggests a fall of 23% in deposits by the non-resident Indian (NRI) deposits into India for the last week of April alone.
The Philippines, another top recipient of remittances in the world with $35.2 billion in 2019. World Bank has predicted a drop of 13% in 2020.
Mexico's economy has been severely affected due to fall in oil prices, tourism, and exports, now with the drop in remittances, we are likely to see a pronounced negative impact.
The average global cost of sending $200 is 6.8% globally according to the data by the World Bank. While the average cost of remitting to South Asian countries is at 4.95% with some corridors below the 3% Sustainable Development Goals target, Africa was at 9%. High competition amongst the remittance service providers due to the high volume of remittances and adoption of technology has been cited as the main factors contributing to success.
The blockchain and the crypto players have long sought to establish a footprint in the sector by solving the major challenges plaguing the remittance industry. And in our earlier predictions, 2020 was going to be the year of blockchain companies and cryptocurrencies specializing in cross-border payment.
Now, due to the coronavirus pandemic, we are yet to see if big players like Ripple can make a meaningful impact on the remittance sector.
New York, 27/05/2023 – Taptap Send, the innovative mobile money transfer application, is proud to announce its partnership with leading remittance solution provider CompareRemit.com. With a focus on empowering immigrants, Taptap Send simplifies the process of sending money back home to India, Pakistan, Philippines, Bangladesh, Sri Lanka, and Nepal.Sending money across borders has long been a complex and expensive endeavor for immigrants supporting their families and loved ones. Taptap Send was developed to address these challenges, providing a user-friendly mobile application that streamlines and optimizes the money transfer process, all through the convenience of a smartphone.Taptap Send offers a range of features designed to enhance the experience for immigrants sending funds back home:Competitive Rates and No Transfer Fees: Taptap Send leverages technology to streamline operations, resulting in more affordable transfers compared to traditional methods.Mobile Accessibility: The Taptap Send mobile application ensures users can initiate money transfers anytime, anywhere.Transparent Pricing: Users are provided with upfront information on exchange rates, allowing them to make informed decisions and have a clear understanding of the total cost of the transfer.Taptap Send aims to break down the barriers faced by immigrants when sending money back home, enabling them to provide vital support to their families and communities with ease and efficiency.Through its partnership with CompareRemit.com, Taptap Send further expands its reach and impact, offering immigrants a comprehensive range of remittance solutions tailored to their specific needs and requirements.To learn more about Taptap Send and explore the various money transfer options available for sending funds to India, Pakistan, Philippines, Bangladesh, Sri Lanka, and Nepal, please visit the Taptap Send website.About Taptap Send:Taptap Send is a mobile money transfer service that simplifies and enhances the process of sending funds internationally. Designed with immigrants in mind, Taptap Send offers a user-friendly mobile application that empowers users to initiate money transfers conveniently and affordably, providing vital support to their families and loved ones across borders.Media Contact:Name: Anthony JacobTitle: Head of Growth, South AsiaEmail: [email protected]
The leading cross-border money transfer comparison portal expands corridor offering to cater to the growing Canadian immigrant marketSANTA CLARA, CA, November 14, 2018 - CompareRemit, a leading online money transfer comparison marketplace, has announced the launch of a new corridor from Canada to India. The marketplace currently offers money transfer channels from the United States and the United Kingdom.According to the Canadian International Development Platform, in 2016, an estimated $23.3 billion was sent from Canada to other countries such as China ($3.9 billion), India ($2.6 billion) and the Philippines ($2.2 billion). With the immigrant market in Canada continuing to see steady growth, CompareRemit seized this opportunity to grow with it and offer users a simple and seamless method for money transfer, while also broadening the market for its wide array of transfer company partners, according to CompareRemit CEO Rajeev Shrivastava."We are excited to add this new Canadian corridor to our platform," he said. "With the addition of a new corridor, CompareRemit now has its presence in the three largest remittance sending countries the US, the UK, and Canada, which gives our users more options than ever to send money overseas."CompareRemit has helped in seamless money transfers of over $1 billion annually with its partnership with leading money transfer service providers from across the globe. With the addition of a new send corridor from Canada to India, CompareRemit is committed to expanding the network of transfer channels to offer users the most convenient and comprehensive money transfer experience available.About CompareRemit: CompareRemit is a leading money transfer comparison portal with the world's best money transfer companies all at one platform. From becoming the first company to offer remittance rates on smartwatches to offering the widest selection of money transfer companies; CompareRemit has emerged as a leader in the industry. CompareRemit offers a mutually beneficial ecosystem where money transfer companies can reach the niche remittance audience while providing users with an easy-to-use platform where they can satisfy all their remittance needs.
The Indian rupee (INR) hit a record low against the US dollar on March 7 amid the sharp surge in global crude oil prices following Russia's invasion of Ukraine and the continued withdrawal of foreign investments (FIIs). The partially convertible rupee (restrictions on certain capital account transactions) fell to INR 75.98 for 1 USD, its weakest level ever. The previous record low of the rupee against the US dollar was 76.91 in April 2020 during the COVID-19 pandemic.What is USD to INR Exchange Rate Today?Today's USD to INR stands at 75.98 (at the time of writing).What Influences INR to USD Exchange Rate?The INR to USD exchange rate is influenced by a combination of factors. In the foreign currency market, the value of a currency is controlled by the basic economic concept of supply and demand.The exchange rate is the value of one currency in terms of another currency (for example, 1 USD to INR today is 75.54). A currency with more demand has a higher value. The exchange rate between two currencies is always changing depending on the market conditions. This is called a floating exchange rate, where the currency value of a country is determined by the foreign exchange market based on supply and demand relative to other countries currencies.How to Transfer Money From USD to INRIf you are looking to send money online abroad, you have to take dollar rupee exchange rates into consideration since it will determine how much money your recipient will receive when it finally arrives in the destination country via USD to INR or INR to USD conversion.This is because online money transfer USD to INR exchange rates fluctuate depending on the market. To get the best deal for your money, it is best to time your money transfer when the rate reaches its desired rate. Subscribe to CompareRemit USD to INR exchange rate alerts to get notified of the best rates. Most banks and money transfer specialists do not offer interbank exchange rates or mid-market (the ones you see on Google). Each offers its exchange rates. The difference in the rates is how they make money. If you're looking for how to transfer INR to USD, you can compare banks and various money transfer companies to find out what the INR to USD exchange rate is today before making your transfer along with how to calculate INR to USD. The best ways to send money from India to the USA should offer you the best USD/INR exchange rate.India's Exchange Rate SystemIndia has a floating exchange system (market-determined). However, the Indian rupee is a partially convertible currency whereby some important restrictions are put in place for higher amounts, and some transactions are prohibited or require approval.No single authority or institution of a country has little or no control over the value of the currency, especially its demand. The demand for a currency is influenced by many factors such as fiscal and monetary policies of the country, inflation rate, trade, political and economic situations of the country, etc.Although the central bank of the respective country can intervene whenever the currency destabilizes. This is done by adjusting the supply of the currency, among other measures.For instance, the Reserve Bank of India maintains a US dollar reserve to ensure stability in the dollar rupee exchange rate. When the demand for the US dollar rises, the dollar value appreciates with respect to the rupee. In response to this, RBI would inject US dollars into the market from its reserve to meet the demands and thus bring down the rising value of the dollar currency. But overall, it is the demand of a particular country that sets its value. Current Volatility of the RupeeExpert economics expects the volatility in the value of the rupee to remain high. The Reserve Bank of India (RBI) intervened to prevent the sharp moves in the rupee by selling dollars via state-run banks. Up to $1.5 billion have been estimated to be sold in the spot market to curb the volatility soon after the rupee hit its lowest level.Reasons Behind Increasing INR to USD Exchange RateSeveral factors are at play for why USD to INR is increasing today. Discussed following are the major factors causing the depreciation of the rupee against the USD.Rising crude oil prices Sell-off in Equities Geopolitical TensionStronger Dollar Global crude oil prices soared to $139 a barrel, more than 6%, reaching their highest since the 2008 global financial crisis on March 7 after the United States and European allies considered a Russian oil import ban. India is the world's third-largest importer of crude oil, importing close to 80% of its fuel requirements. This means INR is very sensitive to rising oil prices. It can potentially skyrocket India's import bills and thus a widening current account deficit. A higher current account deficit means a weakened rupee which further increases inflationary expectations prompting foreign investors to sell more Indian assets. The local equities plummeted by over 2.5%, about $1 billion on March 7. In the first three months of the calendar year, overseas investors withdrew a net of $12.3 billion in local investments, including debt and equities. According to the National Securities Depository Ltd, about $8.5 billion went out in February and the 1st week of March. The slower portfolio flows could also put pressure on the balance of payments.Separately, the uncertainty over the initial share sale of India's largest state-run insurer Life Insurance Corporation of India, worsens the fall in the investment in Indian equities. Analysts estimated that if the sale had occurred, it would have raked in $5 billion-$ 6 billion of foreign investments, supporting the rupee.Geopolitical issues between Russia and Ukraine seem to be far from over, leading to a stronger dollar index and pushing crude oil prices even higher. This will greatly impact India's fiscal math. In the aftermath of the Ukraine crisis, all emerging market currencies are set to lose against the dollar and the pound/euro as global investors seek the safety of dollar-backed assets. With forex reserves at $631.53 billion by early March, traders feel it has enough strength to forestall a much sharper fall in the currency. However, the increasing pressure on the rupee has the potential to upset India's fiscal math, but it is expected to calm down, as per expert currency analysts. We will have to keep an eye on the dollar rupee exchange rate and if the rupee continues to fall amid global crisis.
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