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Kieu hoi to HCM City expected to rise by 20 percent   2010-10-15 - Dau Tu

The volume of kieu hoi (overseas remittance) sent to Vietnam through commercial banks and economic institutions in HCM City so far has increased rapidly. The central bank believes that the volume of kieu hoi this year will outstrip the previous year’s level.

 

Nguyen Hoang Minh, Deputy Director of the HCM City Branch of the State Bank of Vietnam

Kieu hoi is money sent by overseas Vietnamese to their relatives in Vietnam. Calculating kieu hoi is a very important task that can partly reveal the foreign currency situation.

According to Nguyen Hoang Minh, Deputy Director of the HCM City Branch of the State Bank of Vietnam, the volume of kieu hoi to Vietnam through the city’s banks reached $604 million in the third quarter of the year. As such, the total volume of kieu hoi sent in the first nine months of the year had reached $1.733 billion, which is even higher than the volume sent through this channel in the whole year 2009. ($1.688 billion).

Meanwhile, the volume of kieu hoi sent through economic institutions and other kieu hoi was $400 million in the third quarter of the year and $1.270 billion in the first nine months of the year, nearly equal to the volume sent in the whole year 2009 ($1.53 billion).

In total, in the first nine months of the year, the total volume of kieu hoi had reached $3.043 billion, an increase of 17.94 percent in comparison with the same period of the last year.

The strong economic recovery around the world has been cited as the main reason explaining the steady kieu hoi flow to Vietnam. Besides, according to the HCM City Branch of the State Bank of Vietnam, the strong development of the network of kieu hoi service providers and the upgraded services both also have helped increase the volume of kieu hoi this year.

Meanwhile, analysts believe that overseas Vietnamese people have remitted more money to Vietnam because they have been attracted by the high dollar interest rates in Vietnam. The money has been sent by overseas Vietnamese to their relatives, and then the relatives deposit the money at Vietnamese banks to enjoy high profit.

Minh admitted that the deposit dollar interest rates offered by Vietnamese commercial banks are higher than the rates applied in other countries in the world, at 4.5-5 percent per annum on average. Especially, some small joint stock banks are offering higher interest rates in order to attract capital. Therefore, Minh said, it is probable that overseas Vietnamese have sent more money to Vietnam, so that their relatives can deposit money at banks to enjoy high interest rates.

Minh said that the high dollar interest rates applied by commercial banks have put a hard pressure on the dong interest rates. The Vietnam Banking Association has called on its member banks to ease dollar interest rates in order to initiate the dong interest rate decrease.

Minh has predicted that the total volume of kieu hoi to be sent to Vietnam in the whole year 2010 through service providers in HCM City will be higher by 20 percent than 2009. The volume of kieu hoi sent in the fourth quarter of the year is believed to be higher than the previous three quarters, because overseas Vietnamese usually send more money at year end, so that their relatives can spend money to purchase things for Tet.


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