Wissam Fattouh, secretary general of the Union of Arab Banks (UAB), predicted the decline of remittances of Egyptians working in Britain after it voted to leave the European Union.
Fattouh said in a statement issued by the UAB on Sunday that the remittances of Arab expatriates from Britain to Arab countries amounted to about $560m in 2015. Egypt acquired 29.8% of these remittances, Lebanon 27.5%, Morocco 8.7%, and Yemen 7%.
The devaluation of the British pound and the resulting inflation, accompanied by a possible rise in the unemployment rate in Britain, will possibly lead to a decline in the remittances of Arab expats in Britain according to Fattouh. This will cast negative repercussions on the economies of the Arab countries that receive remittances from Britain, he continued.
The devaluation of the euro and the British pound will also lead to the decline of the external debt of the Arab states as they are denominated in euro or British pound, he added.
Fattouh said this will also reduce the cost of European and British imports, leading to a decline in the import expenditures, a reduction of trade, and balance of payments deficits. There is also a potential for a decline in inflation in Arab countries that import from Britain.
Fattouh pointed out that Brexit will have limited impact on Arab banks operating in Britain, saying they will continue their operations as usual. These banks often provide the Arab companies and Arabs living in Britain and Europe with their financing needs.
He added that these banks may experience some losses in their loan portfolios, which are denominated in British pounds as a result of its sharp devaluation.