Local banks are tapping into significant huge overseas cash as Vietnam continues to maintain its growth momentum among the world’s largest remittance beneficiaries.

Remittance inflows to Vietnam are predicted to reach $18.1 billion in 2021, according to a recent announcement from the World Bank and the Global Knowledge Partnership on Migration and Development (KNOMAD).

Remittance flows from Vietnamese expatriates working abroad are predicted to remain resilient throughout the rest of the year, with the country’s central bank keeping its policy steady for now.

Despite the impact of the COVID-19 outbreak, remittances flowing into Ho Chi Minh City increased sharply in the first seven months of 2021.

Visa, the world’s leader in digital payments, has partnered with Vietnamese banks to make it easier for Visa debit card holders to receive inbound remittances using MoneyGram and Remitly. Powered by Visa Direct, cardholders will receive the funds directly to their accounts in near real-time.

Remittances to Ho Chi Minh City reached $3.2 billion in the first six months of this year, up 22.34 per cent compared to 2020.

Even as the global industry is on a declining trajectory, the rising number of international remittances is predicted to flow into Vietnam and some digital initiatives are being explored to smoothen and expedite remittance transactions.

The total remittances to Ho Chi Minh City in 2020 increased 12 per cent on-year to $6.1 billion, setting a new record despite the impact of the COVID-19 pandemic.

After years of constant rise, inward remittance volume to Vietnam slightly retreated last year, but remained at a fairly significant level.

Despite a decline in state budget revenue, remittances, and foreign direct investment, Vietnam is expected to see positive growth with a surplus in current account this year thanks to a rise in export turnover and foreign currency reserves.

Although global remittances are expected to see a sharp decline as the coronavirus-induced crisis continues to drag on the whole economy, Vietnam’s remittance flow is predicted to see a better outlook as overseas citizens send money back home to their relatives, particularly in the context of the upcoming adoption of mobile money services.

Seven Bank announced that it will first provide remittance services to Vietnam with a money remittance platform supplied by its partner DBS Bank.

Despite a decline in state budget revenue, remittances, and foreign direct investment, Vietnam is expected to see a surplus in current account this year thanks to a possible rise in export turnover.

While Vietnam has experienced an unprecedented boom in recent decades, the current pandemic is now having a clear negative impact on the economic outlook. The effects of the crisis, into which Vietnam has fallen completely through no fault of its own, are visible to the naked eye. In Mui Ne for instance, there are only very few guests at the resorts. Ho Chi Minh City’s otherwise lively District 1 restaurants are deserted, and in Hanoi’s Tay Ho district, rents are falling due to a lack of tenants. There are countless other examples. In short, the crisis is felt everywhere. However, these are only the indicators that are quickly recognisable from the outside. Foreign trade, investments, and the not negligible remittances from overseas Vietnamese are also putting pressure on the economy. It is clear to every observer that economic recovery will be a Herculean task. But what can Vietnam do to reposition itself powerfully and finally emerge from the crisis stronger? 

The ongoing COVID-19 outbreak has taken a toll on overseas remittances to Vietnam this year.