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“As COVID-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” said Michal Rutkowski, global director of social protection and jobs global practice at the World Bank. In the pandemic’s early days, it was not uncommon for migrant workers to spare some of their state-issued relief allocations to support struggling relatives back home… aid that is still ongoing during the recovery period. This has been especially important during the Covid pandemic, when many families have had to rely on their relatives abroad to sustain their upkeep after border closures caused many businesses to collapse – leading to income losses. This, therefore, makes remittances a real contributor to development – which can be seen at the household level where many families have risen above poverty through monies sent to them by relatives abroad, all the way to the national level. It is estimated that three-quarters of remittances are used to cover essential things: putting food on the table and covering medical expenses, school fees or housing expenses, as well as loss of crops or family emergencies3. Personal remittances to almost all African countries are also more than the official development assistance they receive. Indeed, every year, about US$82.7bn in personal remittances are sent to Africa – a figure that is nearly double the continent’s foreign direct investment (FDI) flow of US$46bn2. “Assets that are easily convertible into cash, such as money market accounts and bank deposits.Currently, about one billion people in the world are involved with remittances either by sending or receiving them – one in nine people are recipients of these flows of money sent by their family members who have migrated for work1. Converting near-money involves time, and sometimes a fee (exchanging currency, or paying a penalty for taking your money out before the agreed date).Īccording to the Nasdaq Business Glossary, near money is:

Liquidity – money is 100% liquid, near money is not. Making Transactions – we use money directly for making transactions, while near money is an indirect medium of exchange – we need to convert it into money first before it can be used for transactions. In fact, near money’s own value is expressed in terms of money. Prices in shops, for example, are expressed in terms of money. Unit of Account – money is a unit or account, it is a common measure of value. Some differences between money and near money Today however, there is no clear-cut agreement on the definition of what constitutes money.Īmong assets of lower liquidity, as long as whatever the holder owns can be turned into cash almost immediately, it is considered as near money.

Until recently, the majority of economists would agree that money stopped at that point. Since then, bank notes came on the scene, and then bank deposits subject to transfer by check. Up to the 18th century, mainly gold and silver coins were accepted by the public as money. Bonds: specifically those near their redemption date.Bank time deposits: money deposits in a bank that cannot be withdrawn before a certain period (unless a penalty is paid).Money market funds: open-ended mutual funds that invest in short-term debt securities such as commercial paper and US Treasury bills.Foreign currencies: especially the most widely-traded ones such as the US dollar, euro, British pound or Japanese yen.Like ice is to water, near money is to money – it can be converted into the liquid form rapidly.

The money supply can tell us about the health of the economy. When determining the current money supply, economists and central banks may utilize near money.

Near money means non-cash assets that are very liquid but cannot be used directly for transactions. Near money is similar to cash equivalents. Near money, also known as quasi-money, refers to highly liquid assets that can rapidly be converted into cash such as short-term money market instruments and bank deposits.