Foreign remittance

DEFINITION of 'Foreign remittance'

A transfer of money from a migrant worker to their families or other individuals in their home countries. In many countries, remittance constitutes a significant portion of the GDP (up to a third in some cases). The United States is the leading source of foreign remittances, followed by Russia and Saudi Arabia. The top recipients are India, China and the Philippines. So much money is being remitted, the G8 and the World Bank are attempting to monitor and regulate remittance costs.

BREAKING DOWN 'Foreign remittance'

According to social scientists, since it's so widespread, remittance has implications that extend beyond individual finance. For example, since remitting involves financial institutions, people who send and receive remittance are likely to have bank accounts, which promotes economic development. Remittances can be lifesaving in emergencies, such as natural disasters and armed conflicts, when the recepients' other sources of income disappear. Remittance payments are difficult to track, and there is some concern that they can be used in terrorist financing or money laundering.

RELATED TERMS
  1. Remittance

    The term most commonly refers to money being sent via mail or ...
  2. Foreign Exchange Reserves

    Foreign exchange reserves are reserve assets held by a central ...
  3. A-Shares

    Shares in mainland China-based companies that trade on Chinese ...
  4. Personal Finance

    All financial decisions and activities of an individual or household, ...
  5. Brazil, Russia, India And China ...

    An acronym for the economies of Brazil, Russia, India and China ...
  6. Linked Transfer Account

    Accounts held by an individual at a financial institution that ...
Related Articles
  1. Economics

    Introduction To Remittances

    Remittances are an important factor in the global economy, and help drive growth both at home and abroad.
  2. Markets

    Is It Time To Buy Emerging Markets? (EEM)

    The majority of emerging markets are dependent on natural resources, delaying a long-term recovery until commodity markets end historic downtrends.
  3. Economics

    4 Countries Pleading for Higher Commodity Prices

    Discover what countries are struggling the most from the price collapse in commodities and what these countries require to return to economic growth.
  4. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
  5. Stock Analysis

    3 Risks Emerging Markets Debt Faces in 2016

    Learn about the major risks for emerging market debt in 2016. Discover how low interest rate policies by central banks fueled the growth of debt globally.
  6. Investing

    Why Wal-Mart Stores Inc's Latest Closures Matter Less Than You Think (WMT)

    Wal-Mart Stores Inc closed hundreds of stores in January 2016—a move which should reassure investors, not scare them away.
  7. Retirement

    5 Reasons Millennials Lead in Saving for Retirement

    Say what you want to about millennials but the one thing they are doing better than any other generation is saving for retirement. Here's why.
  8. Economics

    India: Why it Might Pay to Be Bullish Right Now

    Many investors are bullish on India for all the right reasons. Does it present an investing opportunity?
  9. Investing News

    What Does the Fire Monkey Mean for Your Portfolio?

    The Chinese new year this year corresponds to the monkey, a quick-witted, playful, tricky figure that means well but has a penchant for causing trouble.
  10. Fundamental Analysis

    4 Predictions for Oil in 2016

    Learn four predictions for oil markets in 2016 including where prices are heading and the key fundamental factors driving the market.
RELATED FAQS
  1. What is the difference between a current account deficit and a trade deficit?

    The terms current account deficit and trade deficit are often used interchangeably but in fact they have substantially different ... Read Full Answer >>
  2. Is Russia a developed country?

    Though it once reigned alongside the United States as a world superpower, Russia is not classified as a developed country ... Read Full Answer >>
  3. How does a cost-of-living adjustment (COLA) affect my salary?

    Some companies build salary adjustments into their compensation structures to offset the effects of inflation on their employees. ... Read Full Answer >>
  4. Is China a developed country?

    Despite having the world's second-largest economy and third-largest military, China is still, as of 2015, not classified ... Read Full Answer >>
  5. Is the Philippines a developed country?

    The Philippines is not a developed country. The nation falls behind on every one of the most common metrics used by economist ... Read Full Answer >>
  6. How do mutual funds work in India?

    Mutual funds in India work in much the same way as mutual funds in the United States. Like their American counterparts, Indian ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center