Ho Chi Minh experience drop in remittances

Inward remittances through commercial banks in HCM City dipped by 19.6 percent against March to 367.6 million USD in April due to economic turmoil and the return of many Vietnamese workers from countries facing political instability.

A top official from the State Bank of Vietnam also confirmed with Vietnam News that total inward remittance sent to the country was down more than 10 percent. However, he refused to release the exact number.

Some investors blamed the decease on the 3 percent 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 Vietnam News.

"The decline could be based on two reasons. Firstly, not all remittances sent to Vietnam 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."

In 2010, total inward remittances sent to Vietnam reached 8 billion USD, in which remittance sent to the country to enjoy high interest rates were estimated at under just 1 billion USD, remittances from overseas labourers accounted for 4.3 billion USD, and the remaining 3 billion USD was an annual stable source of finance from people living abroad, Nghia said.