The move has offered domestic banks opportunities to foster overseas remittance wiring services, expand revenue, enhance the stability of the VND, and relieve the pressure on the USD/VND exchange rate.
Over the last five years, “More than four million Vietnamese compatriots currently staying and working in 187 foreign countries were reported to frequently conduct overseas remittance transactions, especially around the last days of the lunar year as this period usually records a noteworthy leap in holiday shopping among Vietnamese people,” Nguyen Hoang Minh, deputy director of the Ho Chi Minh City branch of the State Bank of Vietnam (SBV) asserted.
Minh noted that, “The majority of overseas remittances transferred to Vietnam in 2017 originated from the US (over 60 per cent) and Europe (19 per cent).”
He also added that, “Overseas remittances sent to Ho Chi Minh City alone was recorded at $5.2 billion, 4.5 per cent higher than the same category in 2016 and accounting for 58 per cent of the total overseas remittance inflows to the country.”
Specifically, according to the latest statistics provided by the World Bank, the total estimated remittances sent from foreign countries in 2017 climbed to roughly $13.8 billion, up 16 per cent against 2016, signifying the most rapid growth in the foreign remittance market over the past five years.
Huynh Trung Minh, a Vietnamese financial specialist, previously highlighted that the foreseeable FED hikes would pose a negligible impact on overseas remittances inflows to Vietnam due to the favourable conditions of current remittance wiring services and the inundating number of overseas workers in foreign countries.
Particularly, the upsurge in overseas remittances could assure a sufficient supply of USD, which in turn could meet individuals and businesses’ demand for foreign currencies.