Expats benefit from dollar transfers
Overseas Filipino workers (OFW) can now make instant money transfers in
US dollars to the Philippines after global money transfer company,
MoneyGram, introduced the facility to help customers avoid fluctuating
exchange rate risks.
MoneyGram is also planning to introduce
the option to transfer money in dollars for other Asian customers if
central banks in these countries change their rules to enable receiving
remittances in greenback.
M Lhuillier Financial Services, a
financial exchange institution in the Philippines, began the first
MoneyGram international money transfer service in April that allows
Filipino customers to receive MoneyGram transactions in US dollars any
time of day.
The introduction of dollar payouts is expected to
be especially appealing to OFWs, as they can maximise the funds that
reach their families by minimising the currency exchange risks.
Normally,
customers pay more for instant international money transfers than the
normal exchange rates. Receiving money in dollars would avoid this,
especially since the recipients can convert the dollars to pesos as per
their convenience and requirement.
Due to the crisis,
remittances from the UAE to the Philippines are expected to come down
by more than six per cent to $1.4 billion (Dh4.18bn) from an estimated
$1.5bn in 2008, and MoneyGram is using the dollar transfer scheme to
lure away customers from Western Union, which does not have this
option. Other Asian expatriates in the UAE cannot enjoy the same
benefit due to central bank restrictions in their home countries.
"We
are offering the option of receiving instant money transfers in dollars
only to the Philippines. We will extend the facility to Indian and
Pakistani customers if their central banks change their rules related
to receiving foreign currencies. In the case of India, there is a
Reserve Bank of India rule that prohibits sending money in dollars,"
said a MoneyGram official.
Industry experts say most instant
money transfer schemes make huge profits by giving an unfavourable
exchange rate to their customers. Even the fees for instant money
transfers vary - Dh15 to India or Pakistan and double, at Dh30, for the
Philippines.
N Selvaraj, manager at City Exchange, a money
exchange company in Ajman, said the facility to receive instant money
transfers to India in dollars was not allowed, but customers could send
dollar cheques through bank accounts.
"Providing such a
facility will definitely help customers avoid exchange rate risks
during uncertain periods in foreign exchange markets. The exchange risk
depends on the conversion ratio in the respective countries."
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