HCM City sees falling remittances from abroad

Remittances into Ho Chi Minh City have shown signs of slowing down and is estimated to reach five billion USD this year, 11 percent short of the year’s expectation.

Monday, December 12, 2016 15:34

HCM City sees falling remittances from abroad ảnh 1

Illustrative image (Source: AFP/VNA)

HCM City (VNA) - Remittances into Ho Chi MinhCity have shown signs of slowing down and is estimated to reach five billionUSD this year, 11 percent short of the year’s expectation.

Banking experts attributed the slowdown to changes in the USmarket under impacts from the US President election in November, but theyexpected the flow will increase around the Lunar New Year Festival which fallsin late January 2017.

According to Deputy Director of the State Bank of Vietnam’s HoChi Minh City branch Nguyen Hoang Minh, remittances from the US account forabout 60 percent of the total amount. Therefore, any changes in the market willremarkably affect the flow of remittances into Vietnam.

Minh pointed to several reasons for the falling remittancesfrom the US market, saying that the possibility that the Federal Reserve (FED) wouldraise its interest rate late this year prompted many to keep their USD insteadof sending the money to Vietnam where the interest rate for deposits inUSD is zero percent.

Besides,no clear improvement related to the Trans Pacific Partnership (TPP) also reducesthe investment amount in Vietnam, Minh added.

Thedrop in overseas remittances will affect the supply of capital for productionand business activities, but not much, since the State Bank has put in placeseveral exchange rate control policies. At the same time, there are othersources of foreign currencies in the market, such as export and tourism.

Discussingrecent fluctuations in the current USD/VND exchange rate, Le Anh Tuan, DeputyDirector General of the UK-based Dragon Capital Group said the changes of 1 – 2percent are small, saying that psychological factor seems to be the forcebehind the changes.

NguyenHong Hue, Vice Chairman of the Association of Overseas Vietnamese Entrepreneursunderlined the potential for Vietnamese overseas making investment at home,particularly in the hi-tech, banking and service sectors.

Asof the end of November, remittances to HCM City totaled 4.36 billion USD. Thefigure is expected to increase with around 120,000 and 130,000 Vietnameseoverseas to return home on the traditional Tet(New Year) holiday.-VNA

VNA

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