Viet-kieu are sending less money ‘home’ this year
Overseas remittances (or kieu hoi) is understood as the money that is sent by overseas Vietnamese (Viet-kieu) to their relatives in Vietnam to support their life and business plans. Statistics about overseas remittances are closely watched by government agencies responsible for managing foreign exchange flows and the national budget.
Pham Hong Hai, a senior executive of the Hong Kong and Shanghai Banking Corporation Vietnam (HSBC Vietnam), said that overseas remittances through HSBC have decreased a little relative to the same period of â008, but the volume remains relatively high.
Meanwhile, the Chairman Le Duc Thuy of the National Finance Supervision Council said that a decrease in overseas remittances in 2009 is inevitable. The global financial crisis has impacted the businesses of Vietnamese people all over the world, so there is less money to be sent to their relatives in Vietnam.
“Some sources say the overseas remittance will be about USD 6.8 billion this year,” Thuy said. Remittances in 2008 reached USD 8.0 billion, or approximately nine percent of national income.
Tran Cong Binh, the Asia Commercial Bank (ACB) manager for Western Union money transfer service, said that he has not seen signs of overseas remittances decreasing so far. However, only 10 percent of the overseas remittances moving through ACB has been via the Western Union system).
“The warnings about the bad global economic performance worried us. However, business has still been good in the first eight months of the year,” Binh said, adding that the company hopes to exceed its annual target by 30 percent.
Binh explained that the overseas remittances to Vietnam through ACB Western Union are “still satisfactory” because the US has tightened controls on remitting money through unofficial channels. Binh said that the money flows have held up best from the US, Europe and Australia, the ‘loyal’ markets.
Total remittances to Vietnam in the first eight months of the year (both through official and unofficial channels) are generally down relative to the previous year, but apparently they have not fallen as far as experts expected earlier in 2009.
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Ho Huu Hanh, director of the HCM City Branch of the State Bank of Vietnam, doubts that remittances through commercial banks in the southern metropolis will reach last year’s level of USD 4 billion. Hanh said that some USD2 billion was remitted through the city’s banks in the first six months of the year.
Meanwhile, overseas remittance service providers have set more modest targets for their business in 2009. Dong A Bank’s Overseas Remittance Service Co., for example, expects to service remittances of USD 1.2 billion this year, the same level as the previous year. The Sacomrex subsidiary of Sacombank also hopes simply to equal last year’s results.
