Where Do Russians Send Money Overseas?
A new report issued by CompareTheMarket shows that Russians transfer the fifth-highest amount of money worldwide, sending USD $22.217 billion (AUD $32.55 billion) overseas in 2019. Russia sent the most money to nations within close proximity, including:
Ukraine: USD $7.870 billion (AUD $11.53 billion)
Uzbekistan: USD $2.801 billion (AUD $4.10 billion)
Kyrgyz Republic: USD $2.002 billion, AUD $2.93 billion).
When it comes to sending money overseas, Russia has some of the lowest money transfer rates in the world. The average cost is only 1.7%, opposed to the worldwide average of 6.8%.
Why Do Russians Send Money Overseas?
Money For Family Back Home
It’s common for migrants to regularly send money to their home country through banks, by sending it directly to family members, or by making financial investments in their birth country.
Payment Of Wages
Money transferred between countries could be to pay employees who once carried out work in a particular country. The World Bank states that personal remittances paid can include payments to employees who worked seasonally or for a short period before returning home.
Russia has also been seen to be one of the more generous countries in sending money overseas. From a population of 141.72 million, each Russian on average per capita remitted US$146.76 abroad.
The World Bank predicts that the COVID-19 pandemic will hugely impact the world’s money transfer habits, with the largest decline in recent history anticipated. The impact will be felt differently across the globe. For example, money transfers to Europe and Central Asia are anticipating drops of around 28%. On average, they’re expected to drop by an average of 20% due to the economic crisis and loss of wages caused by shutdown procedures around the world. Many developing nations rely on money transfers for healthcare, food, education and other basic necessities and a sharp drop could significantly impact these countries. These means that families of workers based in Russia who are reliant on transfers from Russia will need to economize for much of 2020 and well into 2021.
- Central Asian Cash Flow Remittances from Russia Increase as Belt and Road is Restricted to a Project Based Source of Funds
Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at firstname.lastname@example.org for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.