BOJ sees increase in money transfers during June quarter

Preliminary estimates from the Bank of Jamaica have shown that money transfers to the country grew by 14 per cent during the June quarter, reflecting a recovery from the initial onslaught of the COVID-19 pandemic.

Remittances were up 42 per cent in June.

Due to the crisis caused by the coronavirus, and the initial fall-off in remittances, inflows were last projected to decline to US$1.9 billion this fiscal year, down from US$2.3 billion pre-COVID.

The bulk of the remittances were transacted via six remittance companies, led by Western Union.

Moody’s prediction                                                                                   

Meanwhile, the international rating agency, Moody's, projects total remittances to the Caribbean and Latin America will decline by about four per cent this year as immigrants in the US cope with higher unemployment.

A report from Moody's quantifies the impact on remittances under an alternative scenario that contemplates a prolonged pandemic and a delay in the US government extending income support measures.

Under this downside scenario, US remittances to Latin American and Caribbean countries could fall by 10 per cent relative to last year.

According to Moody's, this higher level of unemployment in the US limits the prospects for improvement for remittance flows in the near future.