Mikhail Matveyev, a State Duma deputy from the Communist Party of the Russian Federation, has raised concerns over the substantial flow of money from migrant workers in Russia to their home countries, arguing that these transfers are artificially inflating the demand for foreign currency, particularly the U.S. dollar, and contributing to the depreciation of the Russian ruble.
Matveyev highlighted that millions of migrants working in Russia annually send a significant portion of their earnings back to their home countries. The volume of these transfers, although not fully disclosed, is believed to amount to tens of billions of dollars each year. In 2023, for example, migrant remittances to Tajikistan totaled $5.7bn, equivalent to nearly half of the country’s GDP. Similarly, remittances from Russia accounted for about a third of Kyrgyzstan's GDP and 12-15% of Uzbekistan's GDP, translating into over $14.5bn.
These transfers are reportedly contributing to an increase in demand for foreign currency, especially the dollar, as migrants and their respective diasporas convert their earnings from rubles into foreign currency. This, Matveyev argues, exerts downward pressure on the ruble. Additionally, Matveyev pointed out that several countries within the Commonwealth of Independent States (CIS) have imposed sanctions on Russian banks, limiting the use of the MIR payment system. This has led to a shift where migrants often take cash out of Russia, further exacerbating the pressure on the ruble.
The impact of these remittance flows is particularly evident in countries like Tajikistan, where the ruble has depreciated vitally against the Tajik somoni, ASIA-Plus reports. As of late November 2024, the exchange rate reached a psychological mark of 100 somoni per 1,000 rubles, marking a notable decline of nearly 12% since the start of the month. The ruble has lost over 20% of its value against the somoni since the beginning of the year. This depreciation has had a direct impact on the families of migrant workers, who receive most of their remittances in rubles, resulting in reduced purchasing power.
While Matveyev has drawn attention to the role of migrant remittances in weakening the ruble, Russian President Vladimir Putin, in response, has stated that the ruble’s depreciation is primarily due to rising inflation and fluctuations in oil prices. Experts, however, suggest that the ruble’s recent slide can be attributed to a combination of factors, including Western sanctions on Russian banks, such as the inclusion of Gazprombank on the U.S. sanctions list, and a reduction in foreign exchange earnings, largely driven by low oil prices.
The weakening of the ruble has raised concerns for the economic stability of migrant-sending countries, especially Tajikistan, where over 1.5 mn citizens are employed in Russia. These migrant remittances, while crucial for the economic well-being of their families, are being impacted by the fluctuating exchange rates. The majority of remittances are received in rubles, which has been a growing concern for those relying on these transfers for daily expenses.
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