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Saturday , March 25 2023

Decline in remittances seen

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KUWAIT CITY, Aug 2: A decline in remittances from expatriates in Kuwait during the current year can be expected despite the opening of activities and the return of those stranded abroad, compared to the significant increase in remittances during 2020, which had jumped by 18.4 percent to KD 5.2 billion. The decline can be attributed to the repercussions of the COVID-19 crisis, reports Al-Qabas daily. According to sources in the exchange (forex) sector, with the reopening of activities and allowing the return of about 280,000 expatriates who are stranded abroad, it is expected that the remittances of expatriates will gradually return to normal after they return to their work.

The dominant feature of the remittances of expatriates last year was a decrease in their number and an increase in their value, due to various reasons such as concerns that prompted some expatriates to transfer all their savings in Kuwait, and transfer end-of-service benefits to others, as well as an increase in the value of remittances for those who remained in their jobs. This is due to the high requirements of their families or the increase in the number of individuals who support them as a result of the interruption of their livelihoods in their countries, taking into account that 250,000 expatriates lost their residencies in 2020.

Opposite The sources indicated that the opposite could happen this year due to an increase in the number of transfers and a gradual decline in their value, with the return of activities to normal working hours before the COVID-19 pandemic, and then the regularity of transfers around their normal rates. On the other hand, the sources said they expect the exchange companies’ revenues to continue to grow in 2021, despite the gradual return of remittances to their normal rates, as a result of developments in the market that contributed to the growth of their revenues, led by the increase in the profit margin on transfers to most currencies.

They revealed that the exchange companies added a fixed percentage to remittances above the cost of buying currencies from banks, which contributed to increasing their revenues during the past year, in addition to an increase in the sale of currencies on the impact of the increase in the value of remittances. It is worth highlighting that the revenues of forex companies jumped by 29.4 percent to KD 79.6 million in 2020, and their revenues increased by 37 percent in the first quarter of 2021, compared to the same period last year, before the start of the COVID-19 crisis.

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