Majority Of UAE NRIs Send Money Home – Survey

The majority of non-resident Indians (NRIs) in the UAE send money home, according to the latest Friends Provident International Investor Attitudes survey.

While 85 per cent of the respondents confirmed sending money to India, around a fifth said they had not considered the risks of currency fluctuations.

However, even if respondents had been aware of the downside risk of remitting to their home country five years ago, almost half said they would still have sent money home.

The survey found that only 23 per cent would have definitely taken a different path, and a further 31 per cent would have considered the alternatives.

Matthew Waterfield, Friends Provident International’s general manager, Middle East and Africa said: “I appreciate that people are naturally inclined towards sending money home, whether that is to support their families or to invest in their home market.

“I also understand the attraction of short term high interest rates offered by Indian banks. However, people should be aware that high rates of inflation will erode the real value of their capital.

“In addition, fluctuations in currency exchange rates should be considered. For example, the rupee has fallen in value considerably against the US dollar over the last five years, meaning that $10,000 remitted on 19 November 2008 would be worth just $7,900 five years later – a fall of 21 per cent.

“I suggest that anyone remitting money to their home country should take professional financial advice to determine whether this is the best course of action for them over the longer term,” he added.

Remittances from the UAE reached Dhs45.1 billion in 2012, up from up from Dhs41.2 billion in 2011, according to central bank data.

India is one of the top recipients of global remittances, receiving $69 billion last year.