Illustrative image (Source: tapchitaichinh.vn) Hanoi (VNA) – Remittances to Vietnam have increased despite therise in USD price against other currencies and the zero interest rate forforeign currency savings, factors experts said would impact remittance flow.
In the first seven months of 2018, Ho Chi Minh City received 2.9 billion USD worth ofremittances, 20 percent higher than the same period last year.
Nguyen Hoang Minh, deputy director ofthe State Bank of Vietnam’s HCM City branch, said in the past few yearsremittances to the city have been increasing steadily by 10 percent each year.
Since the beginning of this year, theamount has risen month-on-month, he added.
The country’s macro economic and exchange ratestability means remitttances are converted into VND instead ofretained in dollars. Banks pay zero interest on the greenback.
Minh said in the last three years, 21 percent ofremittances, which have been around 5 billion USD a year, have been invested inreal estate, which is fostering property businesses and economic development.
Dr Bui Quang Tin from the HCM City University ofBanking said remittances could continue to increase this year though the USFederal Reserve has been increasing interest rates - which affects remittancesby attracting flows back to the US - since the increases are only by 0.25 – 0.5percent.
Meanwhile, a savings interest rate of 7-8percent in Vietnam means converting remittances into VND anddepositing them is still highly profitable, he added.-VNA
VNA
