Remittances to HCMC steady

HCM CITY – Despite the strengthening of the dollar against other global currencies, remittances to HCM City have continued to increase.

It received US$2.9 billion worth of remittances in the first seven months of this year, 20 per cent higher than last year.

Nguyễn Hoàng Minh, deputy director of the State Bank of Việt Nam’s HCM City office, said in the past few years remittances to the city have been increasing by steadily.

The country’s economic and exchange rate stability means they are converted into đồng instead of retained in dollars.

Banks pay zero interest on the greenback.

Minh said in the last three years 21 per cent of remittances, which have been around $5 billion a year, have been invested in real estate, which is fostering property businesses and economic development.

Dr Bùi Quang Tín from the HCM City University of Banking said remittances could continue to increase this year though the US Federal Reserve has been increasing interest rates -- which affects remittances by attracting flows back to the US -- since the increases are only by 0.25 – 0.5 per cent.

A savings interest rate of 7-8 per cent means converting remittances into đồng and depositing them is still highly profitable, he added. – VNS