IMF sees growth ahead for Algeria    Egyptian pound inches down in early July 1 trading    Madbouly represents Egypt at 4th UN Conference on Financing for Development in Seville    Bloody escalation in Gaza amid warnings of humanitarian, health catastrophe    Egypt, Iran FMs discuss Gaza truce, nuclear talks revival    Egypt's Environment Minister calls for stronger action on desertification, climate resilience in Africa    Egypt in diplomatic push for Gaza truce, Iran-Israel de-escalation    Peace is not imposed by bombing… nor achieved by normalisation peoples reject: Al-Sisi    Spinneys Opens A New Store in Hurghada    Egypt to launch new dialysis filter factory in July, covering 65% of domestic demand    Egypt teams up with private sector to boost university rankings    Egypt reveals heritage e-training portal    Egypt leverages diplomacy to advance global health partnerships    Egypt to toughen truck safety rules following fatal Ring Road accident    Three ancient rock-cut tombs discovered in Aswan    Egypt condemns deadly terrorist attack in Niger    Egypt, Tunisia discuss boosting healthcare cooperation    Egypt's commodity reserves "very reassuring", some stocks sufficient for 9 months — trade chief    Egypt's FM, China's Wang discuss Iran-Israel escalation    Sisi launches new support initiative for families of war, terrorism victims    Egypt's GAH, Spain's Konecta discuss digital health partnership    Grand Egyptian Museum opening delayed to Q4    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Egypt discovers three New Kingdom tombs in Luxor's Dra' Abu El-Naga    Egypt launches "Memory of the City" app to document urban history    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    Egypt's Democratic Generation Party Evaluates 84 Candidates Ahead of Parliamentary Vote    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Cabinet approves establishment of national medical tourism council to boost healthcare sector    Egypt's PM follows up on Julius Nyerere dam project in Tanzania    Egypt's FM inspects Julius Nyerere Dam project in Tanzania    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Rising remittances from expatriate Egyptians
Published in Ahram Online on 01 - 08 - 2018

Remittances from expatriate Egyptians rose by 48.2 per cent year-on-year in the first 10 months of the 2017/2018 fiscal year to reach $21.9 billion, Central Bank of Egypt (CBE) data showed recently.
The data further showed that in April 2018 alone remittances increased by 41.2 per cent to $2.3 billion from $1.7 billion a year earlier.
Remittances are one of Egypt's main foreign currency earners and contribute significantly to Egypt's gross domestic product (GDP). Egypt's GDP grew by 5.4 per cent in the 2017-2018 fiscal year that ended on 30 June, Prime Minister Mustafa Madbouli said earlier this month.
The rise is attributed to an increase in tourism receipts, Suez Canal revenues and remittances over the past year.
Senior economist at Prime Holding Mona Bedeir ascribed the surge in remittances to the fact that most Egyptians abroad work in Saudi Arabia, which has recently introduced a monthly levy on the dependents of expatriate workers, prompting some Egyptians to send their families back to Egypt.
“As a result, Egyptians abroad are sending a bigger chunk of their incomes back to Egypt to support their families,” she said.
She added that another reason for the surge was investment as some Egyptians living abroad could be sending back their money for investment in Egypt in real estate or dollars, given the strength of the dollar against the Egyptian pound.
The dollar has been trading at an average of LE17.7 to the pound for the last year and half.
However, Bedeir said that the increase in remittances was not sustainable and that it could come at a cost as an increase in remittances without being met by an increase in production would push inflation up.
“Any unexpected income that is not met with real production will prompt a hike in inflation, though this may not happen in this case,” Bedeir told Al-Ahram Weekly.
A recent report on remittances from expatriate Egyptians expected that there would soon be a drop in remittances amid expectations that the US Federal Reserve would hike benchmark interest rates in the US twice this year.
A hike in US interest rates usually prompts a rise in those of the Gulf banks. Following the Federal Reserve's decision to raise its rates last June, most Gulf Central Banks hiked their benchmark interest rates by a quarter of a per cent.
The study suggested that Egyptian expatriates will be lured away from the local banking system by promises of higher yields in the Gulf as a result.
Bedeir said that should the Federal Reserve raise interest rates again this year, remittances from expatriate Egyptians could see a drop, albeit a limited one.
For the 2017-2018 fiscal year, remittances from Egyptians abroad are expected to hit $26 billion, the CBE said this month, a nearly 50 per cent jump year-on-year.
Egyptian expatriates have been increasingly sending back remittances to Egypt following the floatation of the Egyptian pound in late 2016.
Total remittances between November 2016, when the Egyptian currency was floated, and December 2017 recorded $29.1 billion, a 19.2 per cent increase compared to the same period a year earlier, according to a CBE statement in February.
Remittances before the floatation had seen a sharp decline as a foreign currency parallel market caused remittances to leave the formal banking sector as people used the parallel market to get more favourable exchange rates.
In the first half of the current fiscal year, net current remittances drove a contraction of Egypt's current account deficit by 64 per cent year-on-year, as remittances increased to $13.1 billion, up from $10.1 billion in the first half of 2016/2017, the CBE said in April.
Around 9.4 million Egyptians live abroad out of a total population of 104.2 million.
*A version of this article appears in print in the 2 August 2018 edition of Al-Ahram Weekly under the headline: Rising remittances


Clic here to read the story from its source.