Marketplace Morning Report A small tax with high costs
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Mar 26, 2026 Nara Sreetaran, research analyst at AidData who studies remittances, and Jane Foley, head of FX strategy at Rabobank offering market color. They explore a proposed 1% remittance levy and how it raises transfer costs and shifts behavior. They also dig into why the U.S. dollar is strengthening, safe-haven flows, liquidity, and where investors are parking cash.
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Dollar As Global Safe Haven
- The US dollar is acting as the global safe haven and liquidity backbone amid geopolitical uncertainty.
- Jane Foley explains the dollar's deep embedment in supply chains and payment systems keeps demand high and supports short-term liquidity flows.
Liquidity Favors Short Term Assets
- Investors are moving cash into short-term money market assets when uncertainty rises.
- Jane Foley notes liquidity preference pushes funds to the short end so people can enter and exit positions very quickly.
One Percent Tax Raises Total Remittance Costs
- A new 1% federal remittance tax sits atop existing fees, raising total cost significantly.
- Nara Sreetaran says average transfer costs of 5.8% would rise to about 6.8% for cash transfers, a ~17% jump in total cost.