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Remittances to City reach $1.15b in Q1

Update: April, 12/2016 - 10:07
Last year, HCM City, which is one of the top localities nationwide receiving the largest volume of remittances. — File Photo

HÀ NỘI Viet Nam News -— Remittances to HCM City in the first quarter of this year are estimated to have reached US$1.15 billion, up $250 million against last month.

Deputy Director of the State Bank of Việt Nam’s HCM City branch Nguyễn Hoàng Minh said there was no leap in the remittances to HCM City in the first three months, as dollar holders were still waiting to see the consequences of the central bank’s recent policies before deciding on channels to invest in, Minh said.

The central bank has adopted some new policies this year, including the application of the daily reference exchange rate and the reduction of dollar deposit interest to zero per cent.

Last year, HCM City, which is one of the top localities nationwide receiving the largest volume of remittances, received roughly $5.5 billion in remittances, inching up against its $5.2 billion of 2014. More than 70.8 per cent of the remittance value flowed to production and business, while roughly 21.6 per cent poured into real estate and 7 per cent was for relatives.

However, after a good year in 2015, several experts say they are not so confident that remittances will be stable in the upcoming months and years.

According to experts, the US Federal Reserve is likely to continue implementing its roadmap to increase the interest rate on the greenback, affecting the đồng-dollar exchange rate. 

The experts said that this would make overseas Vietnamese reluctant to transfer their savings to the country, since they would receive fewer benefits from the transfers, except in cases where they are investing in projects with high returns.

However, some experts have expressed a contrary opinion, saying a significant growth in remittances is likely this year.

They said the forex rate between đồng and dollar will likely increase by 3 or 5 per cent this year, thus encouraging overseas Vietnamese to transfer more of their savings to Việt Nam to enjoy the benefits of a favourable exchange rate.

Besides this, the clear recovery of the local real estate market and the amended Housing Law that allows foreigners and overseas Vietnamese to own houses in Việt Nam are also important factors likely to motivate overseas Vietnamese to transfer their money here, they said.— VNS

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