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The ease of currency remittance

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The ease of currency remittance into a country’s economy is largely dependent on the state’s standing in the committee of nations. A country facing sanctions is likely to have minimal funds coming in, due to the strained ties with the international community and potential trade partners. Despite the hurdles, a few currency transfer service providers have braved these realities and continued to offer services to the many individuals in need, in countries like Syria, Iran, and Iraq that are war ravaged.

Among the considerations that cash transfer providers have to make before offering services to certain countries or geographical areas include:

Practicality
Political stability
Business viability.

Practicality.
It goes without saying that the financial infrastructure in developing countries is very inadequate. Digital currency transfer that is common in first world countries within Europe and the Americas is usually not available here. Countries such as Syria that have been ravaged by long periods of war have collapsed financial systems. Sending money to such countries can pose a great challenge as existing telecommunication and internet infrastructure are no longer available. Service providers have to take into account such factors before making an entry into such markets.

Political stability.
Sanctions imposed on a country can be a great impediment to currency movement in its economy. Iran’s nuclear ambitions, for instance, led to the US declaring economic sanctions on them in the year 1980. The sanctions were more compounded in 1995 when the US included firms that had dealings with Iran. The country’s economy took a dive and the socio-economic impacts of the sanctions were far reaching. It is only in 2015 that a joint comprehensive plan of action (JCPOA) was drawn by the five permanent United Nations Security Council member states that agreed to Iran proceeding with its nuclear enrichment program albeit under supervision. This move has seen a gradual return to normalcy with Iran’s economy showing positive signs of takeoff. Such situations make it impossible for currency transfers into such economies.

Business viability.
Money transfer service providers need a feasibility study to establish the viability of a venture. Setting up shop in conflict areas like Iraq may not be business savvy. A 2010 survey ranked Iraq unfavorably on the failed states index list. The portrayal of the country’s leadership as corrupt also damaged the country’s image to potential investors. Such countries may be shunned by foreign investors due to these reasons thereby impacting trade and by extension flow of funds.

Civil unrest in turkey has brought with it disastrous implications on its currency – lira. Political upheavals caused by warring parties have led to a massive exit by foreign investors. The lira has lost nearly a fifth of its value since and created panic among Turkish citizens and foreign investors. The locals have abandoned the local currency thereby affecting cash transfers.

In closing.
Financial systems thrive in stable environments with sound economic policies that bolster trade and commerce. Movement of funds into and out of an economy is vital and an ingredient to economic growth.