When the Lunar New Year comes, overseas Vietnamese will promote remittance transfer to families and friends in Vietnam, helping this cash flow increase sharply. This year, the remittances to Vietnam still mainly come from the US, Europe, Australia, Taiwan, South Korea, Japan, etc.
As one of the localities attracting the largest remittances to the country, the remittances transferred to Vietnam through HCM City increase by about 10-15 percent per annum, even accounting for 50 percent of the country’s total remittances in some years.
Nguyen Hoang Minh, director of the State Bank of Vietnam (SBV) HCM City branch said that the remittances transferred through units in the city from the beginning of the year until now have exceeded four billion US dollars and are rising fast.
“In fact, the remittances transferred to Vietnam is often higher year-on-year, in which HCM City always takes the lead in the country in terms of remittances. With the current growth rate, it is likely that HCM City will completes the plan of 5.2 billion US dollars of remittances in 2019, up by about 200 million US dollars compared to 2018,” said Minh.
According to the newly updated annual remittance data of the World Bank (WB), Vietnam ranks the 9th largest country in the world in terms of remittances, estimated to reach 16.7 billion US dollars in 2019 (equivalent to 6.4 percent of the Gross Domestic Product (GDP)), up by 700 million US dollars compared to 2018.
The remittance flows to Vietnam over the last 26 years have increased by nearly 120 times, from 0.14 billion US dollars in 1993 to 10 billion US dollars in 2012, and to 16 billion US dollars in 2018.
According to the WB, Vietnam has ranked the third in Asia and been in the Top 10 of the world in remittance attraction for many years.
In the period of 2000-2015, remittances accounted for about six percent of GDP, while the Foreign Direct Investment (FDI) and Official Development Assistance (ODA) to Vietnam accounted for respectively 7.7 percent and three percent of GDP.
The information given in the macroeconomic report in the first 11 months of 2019 released by BIDV Institute of Research and Training also showed that Vietnam is expected to receive 16.7 billion US dollars of remittances in 2019, among the 10 largest countries in the world in terms of remittances. Continuing to be among the countries receiving the largest remittances has helped stabilise the US dollar/dong exchange rate from the beginning of the year until now.
According to the above report, the factors helping stabilise the exchange rate in recent time include the abundant foreign currency supply, the trade surplus of 9.1 billion US dollars in the first 11 months of the year, the good FDI attraction with disbursement reaching 17.62 billion US dollars, etc.
In addition, the continuous interest rate cut of the US Federal Reserve in 2019 (three times) and forecast of a further decrease in the near future is also a positive factor influencing the dong exchange rate and remittances to Vietnam.
“With this trend, it is forecasted that by the end of 2019, the US dollar/dong exchange rate will continue to be stable and possibly grow by 0.5-0.8 percent compared to the beginning of the year,” the report stated.
Sheshagiri (Sukesh) Mailiah, director of MoneyGram’s Indian Subcontinent, Indo China and Malaysia said that the US, Australia, France and Cambodia have a large Vietnamese community, while Taiwan, South Korea, and Japan see increasing migration of workers from Vietnam.
“Every day, thousands of migrant workers around the world use MoneyGram to transfer the money that they can save. Of which, a large portion of the money is transferred to rural areas of developing countries.
This source of cross-border income plays an important role in supporting healthcare, education, good security and investment in agricultural production in the local country of the migrants,” said Sheshagiri (Sukesh) Mailiah.
