Despite the headwinds that have dominated the year, remittances to low and middle-income countries in 2022 still grew by 5% to $626 billion, the World Bank Migration and Development Brief has said. Africa, where the cost of sending $200 averaged 7.8% in 2022, is the “most severely exposed to the concurrent crises.”
Impact of the Appreciating Ruble and Weaker Euro
According to the newest world bank Migration and Development brief (MDB), total remittances to the supposed low and middle-income countries (LMICs) in 2022 went up by five-hitter to $626 billion. the increase, that is below the 10.2% seen in 2021, came despite the worldwide headwinds that have characterized much of 2022, the report said.
As per the brief, the factors that contributed to the slower rate of growth within the U.S. dollar worth of remittances sent to LMICs embrace the Russian currency’s appreciation, the weaker euro, as well as the deficiency of foreign currency in some countries.
Commenting on the report, Michal Rutkowski, a worldwide director for social protection and jobs at the world Bank, said:
Migrants help to ease tight labor markets in host countries while supporting their families through remittances. Inclusive social protection policies have helped workers weather the income and employment uncertainties created by the COVID-19 pandemic. Such policies have global impacts through remittances and must be continued.
Africa Most Exposed to ‘the Concurrent Crises’
Meanwhile, per the MDB, africa is that the region “most severely exposed to the concurrent crises.” to Illustrate, the report notes that whereas remittances to sub-saharan africa grew by lower than.2% to $53 billion, this increase is markedly not up to the increase of 16.4% that was achieved in 2021. In terms of the price of remitting funds, the brief said the price of sending $200 to the region is 7.8% that is that the highest among the six world regions coated by the study.
Concerning the utilization of digital channels once causing remittances, the report acknowledges that whereas the price of remitting funds via these channels is far lower, many factors still render them less ideal alternatives.
“Digital technologies provide significantly faster and cheaper remittance services. However, the burden of compliance with Anti-Money Laundering/Combating the financing of terrorism laws continues to limit access of recent service suppliers to correspondent banks. These regulations additionally affect migrants’ access to digital remittance services,” the MDB noted.
(Terence Zimwara, Bitcoin.com, 2022)