Processing .....please wait.. 
The article has been forwarded.... 
India to record $40 Billion inward remittance
By siliconindia
|
Tuesday, 03 February 2009, 23:44 IST |
9 Comments
Bangalore: Unfazed by the financial tsunami which blew the strongest of economies, India is expected to record the highest inflow of remittance. The inward remittance will touch more than $40 billion beyond the World Bank's projection of $30 billion in 2008.
The country will witness inward remittance for the second time in a row, as even in 2007 India recorded the highest inflow of funds at $27 billion, followed by China which saw an inflow of $25.7 billion. Unlike FII flows, inward remittances are considered to be extremely sticky as this money, sent on a monthly basis by overseas Indians, is used largely for household consumption, reports The Economic Times.
As per the datas of the Reserve Bank of India (RBI), the country has already crossed $39 billion mark during the first nine months of 2008. "The trend is clearly indicating that we would cross the $40-billion mark easily. This is not surprising given that workers have to send money back home for their families to use. The Q4 remittances typically account for over 20 percent of the calendar year remittances," said Anil Kapur, South Asia Managing Director for Western Union Services, the international money transfer agency. Currently, the data for the fourth quarter ended December, 2008 is not available. The increase in remittance is also perceived to be due to depreciating rupee, which depreciated by 26 percent between January and December 2008. Moreover, Indian banks being permitted to hike interest rates on FCNR(B) and NRE deposits is also aimed at reducing the dependence on FII flows.