Inward remittances through commercial banks in HCM City dipped by 19.6 percent against March to 367.6 million USD in April due to economic turmoil and the return of many Vietnamese workers from countries facing political instability, the State Bank of Vietnam's branch in the city announced.

A top official from the State Bank of Vietnam also confirmed with Vietnam News that total inward remittance sent to the country was down more than 10 percent. However, he refused to release the exact number.

Some investors blamed the decease on the 3 percent cap on US dollar deposits. "The 3-per-cent cap has very little effect on the level of remittances," Deputy General Director of Vietinbank covering treasuries Le Duc Tho told Vietnam News.

"The decline could be based on two reasons. Firstly, not all remittances sent to Vietnam are kept in banks; the receivers may have poured them into other investment channels. Secondly, people are still sending remittances to the country and exchanging the currency for Vietnamese dong to enjoy high interest rates."

Le Xuan Nghia, deputy chairman of the National Financial Supervisory Council, said: "Even when Vietnam cuts interest rate for the dollar, the rate is still higher than the common rate in other countries."

Nguyen Thanh Toai, deputy general director of the ACB shared this view but refused to disclose the amount of the remittances his bank had processed.

In April, when the cap came into effect, the Vietnam Association of Financial Investors (VAFI) said that the 3 percent cap would not affect overseas remittances as no countries in the world would raise their foreign currency deposit interest rates to a "too high" level for the purposes of attracting overseas remittances.

Earlier this year in a Government report, annual overseas remittances to Vietnam were expected to rise at least 6 percent to 8.45 billion USD, from around 8 billion USD last year.

In 2010, total inward remittances sent to Vietnam reached 8 billion USD, in which remittance sent to the country to enjoy high interest rates were estimated at under just 1 billion USD, remittances from overseas labourers accounted for 4.3 billion USD, and the remaining 3 billion USD was an annual stable source of finance from people living abroad, Nghia said. /.