Despite the strengthening of the dollar against other global currencies, remittances to HCM City have continued to increase.

It received US$2.9 billion worth of remittances in the first seven months of this year, 20 per cent higher than last year.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam’s HCM City office, said in the past few years remittances to the city have been increasing by steadily.

The country’s economic and exchange rate stability means they are converted into dong instead of retained in dollars.

Banks pay zero interest on the greenback.

Minh said in the last three years 21 per cent of remittances, which have been around $5 billion a year, have been invested in real estate, which is fostering property businesses and economic development.

Dr Bui Quang Tin from the HCM City University of Banking said remittances could continue to increase this year though the US Federal Reserve has been increasing interest rates — which affects remittances by attracting flows back to the US — since the increases are only by 0.25 – 0.5 per cent.

A savings interest rate of 7-8 per cent means converting remittances into dong and depositing them is still highly profitable, he added. — VNS