Russia-Ukraine Conflict: Implications for Remittance flows to Ukraine and Central Asia

However, remittance flows to Tajikistan, Uzbekistan, and the Kyrgyz Republic will likely decline sharply due to the twin effects of a decline in economic activity in Russia and a weakening of the ruble against the US dollar. [...] The share of remittances received by Ukraine from Russia has steadily declined in recent years, from 27 percent in POLICY BRIEF 17 March 4, 2022 2015 to only 5 percent in 2021 (table 1 and annex table 1).iv Remittance flows from Russia are expected to be disrupted due to sanctions and the exclusion of Russian payment systems from the SWIFT network. [...] Based on an initial assessment of the first-round effects of a decline in economic activity in Russia and a weakening of the ruble against the US dollar, the revised projected growth rates of remittances in this region in 2022 are expected to average around -25 percentage points (table 1). [...] The short-term projections above are highly uncertain, dependent on the scale of the military conflict in Ukraine and the effectiveness of the sanctions on outbound payments from Russia. [...] Even before the war and the sanctions, the cost of sending money to Ukraine was high, ranging from 4.7 percent in Hungary and Italy to 5.9 percent in Poland and 7.0 percent in the Czech Republic (figure 4).