Official remittance flows to developing countries are estimated to have reached $436 billion in 2014, more than three times larger than official development assistance ($135 billion). However, flows to developing countries are expected to slow in 2015, especially in Europe and Central Asia, owing to a weak economic outlook in remittance source countries.
The dollar fell to its lowest level in three months as weaker-than-expected U.S. retail sales reinforced the view that the Federal Reserve will hold off raising interest rates for some time to come. The U.S. dollar index, which tracks the greenback against a basket of six major currencies, fell 1% after hitting a more than three-month low. The gauge has now dropped some 6.5% from a 12-year peak reached in March. Meanwhile, the euro strengthened to as much as $1.137 versus the dollar.
U.S. Treasury prices moved lower, pushing yields up, as Eurozone government bonds extended declines from last week and the U.S. government prepared to sell $64 billion in new coupon-bearing debt this week. The yield on the U.S. 10-year note rose 6 basis points (bps) to 2.2%, while the 30-year bond yield gained 7 bps to 2.97%. The benchmark 10-year German bond yield has gained more than 50 basis points since April 27th.
Despite the recent uptick, oil prices remain about 45 percent lower than their levels in June 2014. While the direct impact of oil prices on poverty are likely to be limited, the indirect effects may be substantial and largely beneficial.
Romania's central bank unexpectedly cut its key interest rate on Wednesday for the seventh consecutive session to a new low. The Board of the National Bank of Romania reduced the monetary policy rate to 1.75% from 2.00%. Economists had expected the bank to leave rates unchanged following a quarter-point reduction in March. The central bank has lowered the rate steadily from 3.50% in six quarter-point reductions since August 2014.