16:32 / 08.12.2020

Central Bank explains reasons for absence of a sharp decline in remittances

Since the start of the pandemic, citizens of Uzbekistan has begun to use banking services more often when sending money from abroad, the Central Bank reports.

As the regulator notes, the pandemic had a significant impact on the volume of remittances between countries. In particular, in the second quarter of 2020, remittances from Russia to Central Asia, Eastern Europe and the Caucasus decreased by 29% compared to the same period last year (during the global financial crisis of 2008-2009, this figure fell by 35%). 

Remittances to Uzbekistan decreased significantly in March-April. Their volume began to increase in May, approaching the indicators of 2019 in August-September. For 9 months of this year, the volume of remittances amounted to $4.3 billion, which is 4% less compared to the same period last year. 

“The absence of a sharp decline in remittances is explained by the fact that in the period before the pandemic, a certain part of remittances came informally (in cash), bypassing the banking system. Since the introduction of quarantine restrictions and the impossibility of moving between countries, the previously unaccounted part of remittances began to pass through the banking system,” the Central Bank said.

Thus, according to a survey conducted by the Central Bank among labor migrants, 85% of respondents said that they send money to the country through the banking system using money transfers, the remaining 15% – in cash or other ways.

The Central Bank expects that if this trend continues, by the end of 2020, the volume of remittances will be less by 6-7% compared to the previous year.

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