The global average cost of sending $200 remains high at 6.8% in the first quarter of 2020, only slightly below the previous yearDue to novel coronavirus, the world bank predicts the remittances to India are likely to plunge by 22 per cent this year.
As per the report, India is the world’s biggest receiver of remittances that helps to strengthen the nation’s foreign exchange reserves.
It is supposed that India has received around $83.1 billion in 2019 via people who are working in a foreign country.
In 2020 global remittances are projected to drop by 20 per cent because of the economic downturn that happened due to coronavirus outbreak, the World Bank said in a release.
One of the reason for the drop in remittances is a fall in the wages and loose jobs of migrant workers who impacted the most amidst lockdown.
The decline in crude oil prices would be led to reduce remittances from oil-producing countries like the USA, UK, Saudi Arabia.
Remittance flows are expected to become even more important as a source of external financing for LMICs as the fall in foreign direct investment (FDI) is expected to be sharper. In 2019, remittance flows to LMICs exceeded FDI, the World Bank said in a report.
“The global average cost of sending $200 remains high at 6.8% in the first quarter of 2020, only slightly below the previous year,” the report said.