By Pádraig Hoare
There has been a huge surge in credit union members sending money to relatives in the UK since the Brexit referendum, according to a report by a foreign exchange specialist.
Data from Fexco Corporate Payments showed an 82% surge in the amount sent to the UK by credit union members, with favourable exchange rates largely behind the spike.
The majority of funds sent has gone to relatives, while tactical transactions to take advantage of the weaker sterling has also increased, it said.
Credit unions, as not-for-profit organisations, “offer highly competitive exchange rates” when compared with banks, said Fexco.
Its head of dealing, David Lamb, said: “Uncertainty over Ireland’s future relationship with a non-EU Britain remains a worry for the 350,000 Irish citizens living, working, and studying in Britain.
In the first six months of 2017, credit union members sent 61% more to the UK than during the same period in 2016, prior to the UK’s Brexit referendum.
The first six months of 2018 rose to 82% above its pre-referendum level, said Fexco.
Transactions rose by a quarter between 2016 and 2018, and the average transaction value was up 46% to €6,187 in the first half of 2018.
Mr Lamb said the strength of the euro compared to the pound, coupled with the ease and convenience of transferring money through a credit union, has made conditions ripe for Irish customers wanting to transfer money to relatives in Britain.
They were also sending money to make major purchases like cars, he said.
“The euro has gained 16% against the pound since the UK voted to leave the EU, going from 76.6p just prior to the Brexit referendum to around 87.5p this week,” said Mr Lamb.
Sterling hit a three-and-a-half month high against the euro and added to gains against the dollar yesterday on optimism Britain and the EU can agree a deal soon. It was up 0.1% versus the euro at 87.43p per euro.
“We’ve been here before (with Brexit hopes) but this pound move might have a little further to run, especially against the Australian and New Zealand dollars,” Chris Turner, head of foreign exchange strategy at ING,
- Additional reporting Reuters