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City sees 20% drop in remittances
Inward remittances through commercial banks in HCM City dipped by 19.6 per cent against March to US$367.6 million in April due to economic turmoil and the return of many Vietnamese workers from countries facing political instability, the State Bank of Viet Nam's branch in the city announced.
A top official from the State Bank of Viet Nam also confirmed with Viet Nam News that total inward remittance sent to the country was down more than 10 per cent. However, he refused to release the exact number.
Some investors blamed the decease on the 3 per cent cap on US dollar deposits. "The 3-per-cent cap has very little effect on the level of remittances," Deputy General Director of Vietinbank covering treasuries Le Duc Tho told Viet Nam News.
"The decline could be based on two reasons. Firstly, not all remittances sent to Viet Nam are kept in banks; the receivers may have poured them into other investment channels. Secondly, people are still sending remittances to the country and exchanging the currency for Vietnamese dong to enjoy high interest rates."
Le Xuan Nghia, Deputy Chairman of the National Financial Supervisory Council, said: "Even when Viet Nam cuts interest rate for the dollar, the rate is still higher than the common rate in other countries."
Nguyen Thanh Toai, Deputy General Director of the ACB shared this view but refused to disclose the amount of the remittances his bank had processed.
In April, when the cap came into effect, the Viet Nam Association of Financial Investors (VAFI) said that the 3-per-cent cap would not affect overseas remittances as no countries in the world would raise their foreign currency deposit interest rates to a "too high" level for the purposes of attracting overseas remittances.
Earlier this year in a Government report, annual overseas remittances to Viet Nam were expected to rise at least 6 per cent to $8.45 billion, from around $8 billion last year.
In 2010, total inward remittances sent to Viet Nam reached $8 billion, in which remittance sent to the country to enjoy high interest rates were estimated at under just $1 billion, remittances from overseas labourers accounted for $4.3 billion, and the remaining $3 billion was an annual stable source of finance from people living abroad, Nghia said.
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