Overseas remittances predicted to hit $8 billion this year

Overseas remittances to Viet Nam is expected to hit US$8 billion this year, a 60 percent surge over last year, a State Bank of Viet Nam official has said.

In the first half of the year, 3.5 billion USD in overseas remittances were transferred to Viet Nam, Deputy Director of the central bank’s Foreign Exchange Management Department, Nguyen Ngoc Lan, told a Viet Nam News Agency reporter.

The Bank for Foreign Trade of Viet Nam (Vietcombank), Bank for Agriculture and Rural Development, Dong A Bank, Sacombank, and Asia Commercial Bank (ACB) said they transferred between US$400 million to US$750 million in overseas remittances in those months.

According to the official of the central bank, the Government’s flexible foreign exchange management and preferential treatments offered to overseas Vietnamese, including a policy allowing overseas Vietnamese to buy houses in the homeland, has drawn more overseas remittances.

Additionally, the country’s stable exchange rate policy and international financial institutions’ upbeat assessments on Viet Nam’s economy in mid and long terms were other factors to convince overseas Vietnamese to remit home more money, he said.

Lan added that remittances, which used to stand at several hundreds of US dollar each transaction in the past, now amounted to thousands or tens of thousands of US dollar for investment in business or savings.

More overseas Vietnamese opted to deposit money in banks in the homeland due to the 7-8 percent interest rate applicable for USD deposits rather than keeping in their host countries’ banks, whose interest rate stands at 2-3 percent, the State Bank official said.

Banks provided the fact that though overseas remittances have still come mostly from Vietnamese living in the US, Australia, and European countries, more are coming from Vietnamese experts, students and guest workers.

To attract more clients, many banks and companies engaged in transferring money have improved their services, including opening agents in new markets and strengthening old ones in the US and Australia where the majority of Vietnamese are residing in.

Recently, the Dong A Bank has partnered with the MoneyGram company to provide the delivery of overseas remittances in gold, foreign currencies or dong, to requested addresses.

The SBV official said overseas remittances have contributed to increasing the country’s foreign currency reserve to improve the balance of trade and capital, particularly at a time when the country’s trade deficit has reached an alarming rate.

Source: VNA

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