Vibrant real estate market and high US dollar saving rates made the remittances transferred into Vietnam in 2010 exceed nearly $2 billion against the year’s target.
In 2010, the total inward remittance sent to Vietnam reached over $8 billion, up 25.6 percent from the previous year and exceeding the initial target of $6 billion.
Almost commercial banks said that the total inward remittance sent to the country grew over 20 percent year-on-year. In particular, the total volume of inward remittance transferred into Vietnam via Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) reached $1.3 billion, rising 45 percent y-o-y and the figure at Eastern Asia Commercial Joint Stock Bank (DongA Bank) Remittance Co was $1.2 billion, rising 20 percent from 2009’s.
The sudden increase in the inward remittance to Vietnam in 2010 was quite surprising because in 2009 the inflow remittance to Vietnam fell nearly 13 percent from 2008’s to $6.3 billion.
According to Vo Tri Thanh, deputy head of Central Institute for Economic Management (CIEM), there were two main reasons for the strong shift of remittance into Vietnam in 2010.
The first was the briskness in the realty market and the second was attractiveness of US dollar saving rate at commercial banks in Vietnam.
When the US dollar interest rate in the world currently is relatively low (the interbank lending rate in the world is now ranging around 0.23-0.78 percent/year for all terms), in Vietnam, the commercial banks are applying the interest rate around 5 percent per annum for US dollar deposits.
Moreover, during past years, the inward remittance increased strongly party due to the government’s open remittance policy allowing receiving and sending in US dollar. Commercial banks have been continuously upgrading the remittance services to each family.
It is forecasted that the total inward remittance sent to Vietnam in 2011 would increase by 6.2 percent.
According to World Bank (WB), Vietnam has been ranked at the 16th position amongst 30 countries receiving most remittances in the world.
On the macro factor, the remittances have contributed in reducing the imbalance in the balance of payments, improving forex reserves, and reducing the pressure on exchange rate increases.
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