The United Kingdom’s decision to leave the European Union earlier this year, sent shockwaves around the world. Its impact is still ramifying as the Pound Sterling value just hit a new 31-year low against the US dollar this past week.
Did this result in panic-buying of the pound sterling across the GCC region? What consequences did it entail on the remittances industry? On the economy in general? These questions are answered as industry experts from The Foreign Exchange & Remittance Group, UAE Exchange and Xpress Money share their opinion on the subject matter.
Commenting on the impact of the Pound Sterling’s fall on the British economy, Mr. Rajiv Raipancholia, The Foreign Exchange and Remittance Group Secretary, said: ‘As the Pound continues to depreciate, individuals are looking for an opportunity to invest in the U.K. property market. Travel to U.K. for a holiday has become more favourable due to a weaker pound. The number of transactions for pounds’ remittances have increased but what is more important is that we have seen the amounts (volumes) grow by 15% to 20% in the last two weeks’.
Exchange houses across the GCC have witnessed a remarkable pick up in business, with many requests for transfers to the United Kingdom during the past week.
‘The Great Britain Pound has been on a downward path post-Brexit. It hit a 31-year low last week, resulting in a loss of up to 18 per cent of its value but profitable to the Europeans residing in the GCC countries of Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. With the GCC currencies pegged to the dollar, the weakening of the Sterling has positively impacted remittances. At UAE Exchange, our remittance volume from GCC to UK showed a steep growth of 135 per cent the past week vis-‘-vis the same period during last month. Though uncertainties prevail around UK’s economic prospects outside the EU, British expats are cashing on the favorable exchange rate and remitting to their home country,’ said Promoth Manghat, Chief Executive Officer, UAE Exchange.
From his side, Mr. Sudhesh Giriyan, COO, Xpress Money was quoted saying ‘Since the Brexit, the sterling pound has lost up to 18% of its value to hit 31-year lows. The pound has continued to fall against the US dollar as worries persist over UK’s economic prospects outside the EU. Treasury data shows that British expatriates worldwide, including the UAE and GCC region, are taking advantage of the weakening pound and are remitting money back home at very favorable exchange rates. As British citizens are one of the largest western expat groups in the UAE, remittances to the UK have picked up due to depreciation of the currency and we see this trend continuing in the coming days.’
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