Remittances into Vietnam this year are flowing strongly with the Tet lunar new year holiday approaching, despite the gloomy global and domestic economy.
According to a World Bank (WB) remittances report update for 2012 released late November, 2012, the expected remittances to Vietnam this year is $9 billion, ranking ninth out of 10 recipients of migrant remittances worldwide. The first and second places belong to India and China, respectively.
Last year, Vietnam also received $9 billion in remittances, ranking 16th out of the 30 countries that have received the most remittances in the world.
An analysis from the National Financial Supervisory Committee early this month exceeded the World Bank estimates, forecasting that overseas remittances to Vietnam during 2012 would reach between $10 billion and $11 billion.
According to the WB, a strong performance in exports, slower growth in imports and continued robust flow of remittances have helped Vietnam to turn around its external economic sector. This, in turn, has contributed to improving its balance of payments, augmented its stock of foreign exchange reserves and helped to reduce pressure on the VND/USD exchange rate.
Moreover, remittances are expected to flow more strongly in the coming time, when the Tet holiday is coming near. According to Tran Van Trung, director of Dong A Money Transfer Company, during Tet the demand to send remittances as gifts might increase by 50 per cent compared to the previous month. Tet this year will be in February, 2013.
“It is proved in Dong A Money Transfer Company’s remittance volume of $1.35 billion in the first 11 months of this year and the expected total volume is $1.4 billion for this year, achieving our company’s year-plan target,” said Trung.
Moreover, Trung added that the stable exchange rate was a contributor to increasing remittances. People receiving remittances have tended to exchange to VND right at the banks due to the close gap between official and parallel forex market rates, helping banks’ forex reserve increase.
Agreeing with Trung is Ngo Xuan Hai, director of Money Transfer – Vietinbank, who said normally in the months close to Tet holiday, remittances from overseas Vietnamese was very strong.
Hai said 2012 had been a difficult year, especially in the countries where many overseas Vietnamese live, such as the US and European countries. “Vietnam’s economy faces more difficulties than last year, including frozen stock and real estate markets.”
“Thus in 2012, there is mostly no change in inflow remittances to Vietnam compared to 2011. Remittances transferred through Vietinbank increased by more than 10 per cent compared to last year. Almost all of the remittances were used to support their relatives rather than invest in the local real estate market like last year,” added Hai. Last year, remittance transferred through Vietinbank reached $1.3 billion, up 15 per cent compared to 2010.
Phan Huy Khang, general director of Sacombank, said that the remittance through Sacombank Remittance Company was $1.6 billion in the first 11 months of this year, achieving its year-plan volume.
Vietnam Investment Review