Cost of remittances from the U.S. fall to 10.19 percent in Q2
The U.S. is the sixth-largest means for electronic cash transfers to Lebanon (File/AFP)
Figures issued by the World Bank show that the cost of sending remittances from the United States to Lebanon reached 10.19 percent in the second quarter of 2014 for a $200 transfer, down from 10.81 percent in the first quarter of the year and from 10.72 percent in the fourth quarter of 2013. Also, the cost of sending $500 from the U.S. to Lebanon reached 5.37 percent in the second quarter of 2014, compared to 5.41 percent in the previous quarter and 5.32 percent in the fourth quarter of 2013, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group.
The cost includes the transaction fee and exchange rate margin, and represents the average cost of transferring money through commercial banks and money transfer operators. In nominal terms, the cost of sending $200 and $500 from the U.S. was $20.37 and $26.84, respectively, in the second quarter of 2014 compared to $21.62 and $27.04, respectively, in the preceding quarter.
Lebanon received $7.2 billion in remittance inflows from the Lebanese diaspora in 2013, equivalent to 16 percent of the country’s GDP. Lebanon was the 12th-largest recipient of remittances among developing economies and the second-largest in the Arab world.
Further, the cost of sending remittances from Germany to Lebanon reached 16.05 percent in the second quarter of 2014 for a transfer of 140 euros (about $200), constituting a decrease from 16.79 percent in the first quarter of 2014 and 17.31 percent in the fourth quarter of last year. Also, the cost of sending 345 euros from Germany reached 8.12 percent in the second quarter of this year relative to 8.44 percent in the preceding quarter and 8.52 percent in the fourth quarter of 2013.
In nominal terms, the cost of sending 140 euros and 345 euros from Germany was 22.48 euros and 28 euros, respectively, in the second quarter of 2014 compared to 23.50 euros and 29.12 euros, respectively, in the previous quarter.
In parallel, Lebanon ranked as the second-most expensive destination for sending $200 from the U.S. among 30 countries with available data, after only Thailand (11.06 percent). It was the sixth-most expensive for sending $500.
The data covered 14 countries in Latin and Central America and the Caribbean, seven nations in East and Southeast Asia, and six in Africa, in addition to Lebanon, Yemen and Jordan in the Middle East.
The United States is the sixth-largest source of inward electronic cash transfers to Lebanon. Also, Lebanon came as the most expensive destination for sending 140 euros, or about $200, from Germany among 13 countries with available data, as well as the most expensive destination for sending 345 euros, or about $500.
The World Bank indicated that the average cost to send $500 in remittances from the U.S. through commercial banks to Lebanon was 7.50 percent and the average cost through MTOs was 4.30 percent in the second quarter of 2014.
In comparison, the average cost to send $500 in remittances through commercial banks to Lebanon was 8 percent and the average cost through MTOs was 4.11 percent in the first quarter of 2014, while it was 8 percent and 3.98 percent, respectively, in the fourth quarter of 2013.
MTOs account for about 70 percent of all cash electronic transactions to Lebanon, followed by money dealers with 22.4 percent and commercial banks with 7.5 percent.
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