Inbound remittances on a rise
Tuesday, October 02, 2012, 14:00 GMT+7
Though the main remittances attraction channels, including real estate and securities, have not prospered yet this year, inbound remittances have still increased.
In Ho Chi Minh City alone, inward remittances in the first nine months of this year reached $2.8 billion, equal to nearly 81.5 percent of all of 2011.
According to data from the State Committee for Overseas Vietnamese Affairs, in the first half of the year, inward remittances sent to Vietnam reached more than $6.3 billion, equaling 70 percent compared to 2011.
Earlier, according to figures from the first six months of 2012, the inbound remittance volume sent to the southern economic hub reached $1.9 billion.
Representative of Sacomrex Remittance Co, a subsidiary of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), said that as of the end of August, the volume of inbound remittances sent to Vietnam via their company had reached $1.2 billion, rising 20 percent year-on-year, though this period was not the peak time of remittances.
The company’s major remittance markets are still the US and Australia and foreign markets with a high rate of Vietnamese laborers with relatively attractive salaries, such as Japan and South Korea.
Trinh Hoai Nam, deputy director of EAB Remittances Co under Dong A Commercial Joint Stock Bank, said that the total remittance volume sent to Vietnam via the company in the first eight months of this year exceeded $1 billion.
On the other hand, the amount of inbound remittances are thinning, from a popular rate of $600-700 each previously to $300-500 recently, Nam said.
But the absolute number of inbound remittances sent via the firm is still a surprise, as many foreign economies are facing long-term difficulties.
According to remittance companies, money transferred to Vietnam recently mainly flowed into rural and remote areas, from which a huge volume of local workers have been sent to work abroad recently.
Previously, inward remittances were mainly channeled into family with relatives living abroad. Currently, many overseas Vietnamese are also sending money to build houses or invest locally.
Nam forecasted that the company’s inward remittances volume sent to Vietnam this year may reach $1.4-1.5 billion.
In addition, according to remittances companies, the increase of inbound remittances is also partially thanks to the high depositing interest rate of the dong, as many remittance recipients have converted foreign currencies, mostly US dollars, into dong to create savings and enjoy interest rate differences.
“In comparison with last year, the dong deposit interest rate decreased but the forex rate was stable. Therefore, the difference in interest rates was still attractive,” the director of a remittance company said.
Snap service is also a plus, as the time needed to transfer money from the US to Vietnam is now just a few seconds. Smooth connections have speeded up a process that needed many intermediaries in the past, said Pham Thuy Nga, head of the banking product and policy department under Vietcombank.
Many experts have forecast that the inward remittances sent to Vietnam this year may reach $10-11 billion, rising 30 percent year-on-year.
The HCMC branch of the State Bank of Vietnam (SBV) said the demand for foreign currency to pay for goods or services of businesses increased sharply in the third quarter of 2012 compared to that in the first six months of the year.
Total sales of foreign currency for economic organizations and individuals in the third quarter were at $13.74 billion and $489 million.
However, the central bank has yet to satisfy the needs of foreign currencies for other purposes including studying, medical treatment and resettlement abroad.
The transactions in foreign currencies at local banks showed no supply shortage as the banks have yet to adjust the foreign exchange rate over the SBV ceiling to attract depositors and limit buyers.
