Inward remittance likely to spike towards year-end
Inward remittance likely to spike towards year-end
Inward remittances have managed growth momentum in the year to date and this trend is expected to linger towards the year-end, particularly before the upcoming holidays.
According to Nguyen Duc Lenh, deputy director of State Bank of Vietnam’s Ho Chi Minh City branch, by the end of September inwards remittances to Ho Chi Minh City came to nearly $6.69 billion, surpassing the 2022 level.
This figure surged 40 per cent compared to one year ago and equalled 101.3 per cent of last year’s level.
In the third quarter (Q3) of this year, more than $2.35 billion of inward remittances came to Ho Chi Minh City, up 6.2 per cent over the previous quarter, whereas in Q2, inward remittance volume to this southern region engine expanded 4.5 per cent compared to Q1, showing fair positive on-quarter growth of inward remittance so far this year.
Dinh Duc Quang, cash management executive director of UOB Vietnam, said that the Fed would temporarily cease raising their interest rate in the rest of 2023, so that the VND and US dollar exchange rate might fluctuate in a controlled range, partly thanks to continued influx of foreign direct investment and inward remittance into the country.
Senior economist Nguyen Tri Hieu assumed that nearly $6.7 billion inward remittance to Ho Chi Minh City in the first three quartes was an inspiring result in the current context.
Significantly, State Bank of Vietnam (SBV) statistics show that in the past five years, inward remittances to Ho Chi Minh City have always held a big share of the country’s total.
Particularly, this volume accounted for 44.1 per cent of the country’s total in 2018, increasing to 48 per cent in 2019, further approaching 53.8 per cent in 2020, slightly going down to 52.8 per cent in 2021 before reaching 55.03 per cent in 2022.
Lenh from SBV’s southern branch noted that the remittance volume from Asia continues to lead other regions, making up 53.1 per cent in Q3, showing 19.8 per cent jump compared to Q2 of this year.
Lenh said that to secure inward remittance fair growth in the upcoming time, business and credit organisations directly dealing with this capital flow need to continue efforts to boost operational efficiency and constantly improve service quality, while simultaneously banks have to bolster efficiency.
According to World Bank's August report, external demand will rebound gradually from the fourth quarter of this year, before resuming growth pace from late 2024, underpinning an upsurge in goods merchandise and an improvement of Vietnam’s trade balance in the forthcoming time.
The volume of international visitors to Vietnam is also expected to swell further.
The report also forecast Vietnam’s inward remittances would fetch $14 billion this year and $14.4 billion next.
