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Remittances to Vietnam surge ahead of Lunar New Year

Saturday, January 26, 2019, 10:38 GMT+7
Remittances to Vietnam surge ahead of Lunar New Year

Remittances to Vietnam from overseas Vietnamese, guest workers and people who want to make investments at home have surged ahead of Tet, or the Lunar New Year holiday that begins next month.

Revenue from remittance transactions in January at SBR, the remittance unit under Ho Chi Minh City-based lender Sacombank, were 200-300 percent higher than figures in the other months of the year, according to chairman and general director Tran Minh Khoa.

Similarly, Dong A Money Transfer, the remittance arm of local lender Dong A Bank, recorded some 140,000 remittance transactions in the first half of this month alone, up 17 percent year-on-year, according to deputy director and sales manager Vu Thanh Trung.

As regulations on money transfer at each country vary, the amounts of remittance per transaction are also different, according to Trung.

For instance, money sent home by Vietnamese from Asian countries range between US$1,000-2,000 per transaction, while remittances sent from the U.S. can be from $500 to $800 per transaction.

Remittances to Vietnam in 2018 were estimated at $18.9 billion, accounting for 6.6 percent of the country’s GDP (gross domestic products), the Vietnam Television reported on December 25.

Earlier, statistics by the World Bank showed that Vietnam’s remittance grew ten percent year on year.

The country received $11.88 billion and $13.8 billion of remittances in 2016 and 2017, respectively.

The World Bank thus forecast that Vietnam would remain one of the largest recipients of remittances in the world in 2018, with the year’s remittances estimated at $15.9 billion.

According to Khoa, the SBR chairman, while overseas Vietnamese, or Viet Kieu, used to be the main source of remittances, money now also come from guest workers and people who want to invest in production and business in the Southeast Asian country.

“Remittances from overseas Vietnamese were even decreasing as their relatives in Vietnam were less dependent on this kind of aid, given the country’s increased per capita income,” Khoa said.

In addition, the generation of overseas Vietnamese that mainly made up of remittance flow to Vietnam is getting older and have fewer relatives who stay in Vietnam.

Meanwhile, remittances from Vietnamese guest workers, according to Khoa, are growing strongly because the number of people joining the labor export market increases 10-15 percent annually on average.

According to a report by the Department of Overseas Labor Management under the Ministry of Labor, Invalids and Social Affairs, there were 142,860 Vietnamese working in other parts of the world in 2018, exceeding the normal figure of 100,000 Vietnamese guest workers per year.

Accordingly, Vietnamese workers in Taiwan, Japan, Malaysia, South Korea, and the UAE have been the leading sources of remittances to Vietnam.

Vietnam has maintained a zero percent interest-rate on deposits in U.S. dollars since 2015, meaning people were no longer able to take profit from savings in the foreign currency. Despite this, remittances in U.S. dollars to Vietnam remain on a positive trend, according to Nguyen Hoang Minh, deputy director of the Ho Chi Minh City branch of the State Bank of Vietnam.

By the end of 2018, remittances to Ho Chi Minh City were estimated at $5 billion, according to Minh.

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