The lower interest rates will not affect the inflow
of remittances by Vietnamese abroad, the Viet Nam Association of Financial
Investors has assured.

“No country in the
world sets high dollar-deposit interest rates with the aim of attracting
remittances from their citizens abroad,” the Vietnam Economic Times quoted
Nguyen Hoang Hai, VAFI general secretary, as saying.

The assurances come after
analysts warned that the 3 per cent cap on dollar interest rates could cause
remittances by overseas Vietnamese to dry up and possibly increase flows in the
reverse direction.

Sai Gon Tiep Thi (Saigon
Marketing) newspaper claimed in a story that large amounts of remittances have
been flowing into the country because interest rates are higher than elsewhere
in the world.

The remittances rose 17.9
per cent on average between 2000 and 2007, before jumping by 30.9 per cent in
2008, and 27.3 per cent in 2010.

In that period, the interest
for three-month dollar deposits rose from 4 per cent in 2007 to 6.5 per cent in
mid-2008. Again it shot up from 1.5 per cent in mid-2009 to 4 per cent in
mid-2010.

The 3 – 4 per cent gap
between dollar interest rates in Viet Nam
and the US between 2008 and
2010 were large enough to attract dollar to Viet Nam.

Last year alone $600 million
were remitted to Viet Nam
to take advantage of this gap, Sai Gon Marketing said.

VAFI, however, attributes
the sharp rise in remittances mainly to the jump in the number of Vietnamese
working abroad.

In the past few years 70,000
to 80,000 Vietnamese have gone abroad every year, and most remitted their
savings home since they did not qualify to resettle abroad.

Asked about a possible
repatriation ofdollar abroad, Hai said without the State Bank of Viet Nam’s
permission, remitting foreign currencies abroad is “illegal” and not
“an easy task.”

According to SBV figures,
inward remittances went up from $1.2 billion in 1999 to more than $8 billion
last year.

But the media has said this
only takes into account the remittances received through formal channels and
does not consider the money brought home by returnees and sent through other
channels.

Source: VNS