Illustrative image (Source: internet)
According to the State Bank of Vietnam’s HCM City branch, the remittance flows were mainly from the US (60%) and Europe (19%).
As many as 72% of the remittances was invested in production and business, while only 22% was poured into real estate and 6 percent for personal consumption, the agency said.
The local authority has effectively used the resources for its socio-economic development, it added.
The agency forecast that the remittance to HCM City in 2018 would surge about 20% compared to the previous year though the US Federal Reserve increased interest rates for the second time in 2018 to between 1.75% and 2% per year, and Vietnam is applying interest rates on USD savings at 0%.
Many commercial banks said those who receive remittances have converted their foreign currency to VND for savings because they found that savings in VND was more profitable than keeping USD.
In recent years, remittances to HCM City has increased by an average of 8 to 10 percent per year.