The US dollar's strength against Asian currencies is leading to a surge in remittances from migrant workers in the Gulf Arab region, exchange houses say, giving a boost to their home countries such as India, the Philippines and Pakistan.
But lower oil prices are expected to gradually reduce demand for blue-collar workers, tempering growth in remittances next year, say industry executives.
With its huge population of expatriates, the Gulf is one of the most important sources of remittances as mainly lower-skilled workers send money home to families in Asia.
Expatriates in the Gulf sent home $93.4 billion in 2013, according to the World Bank, which rates Saudi Arabia and the UAE among the top five migrant destination countries.
With most Gulf currencies pegged to the dollar, its rise in recent months has helped swell remittances as expatriates take advantage of the strong dollar.
Year-to-date, the dollar is up 4.84 per cent against the Indian rupee, 3.75 per cent against the Pakistani rupee, 2.65 per cent against the Chinese yuan and 4.7 per cent against the Philippine peso, according to Thomson Reuters data.
"The majority of migrants are those that have to remit money whatever the currency situation, but there are also opportunists, who time their savings on currency weakness and we have seen a great surge in those remitters," said Promoth Manghat, chief executive of UAE Exchange, one of the largest exchange houses in the region.
UAE Exchange has seen growth in remittances to India, its largest market, of around 15 per cent year-on-year in the last two months, up from eight to 10 per cent in the first half of the year, Manghat said.
Rajiv Raipancholia, chief executive of UAE-based Orient Exchange and secretary of industry body Foreign Exchange and Remittance Group, forecasts remittances growth for the UAE industry of five per cent in 2016, down from 10 to 15 per cent in 2015.
