Remittances to HCM City in the first quarter of this year is estimated to have reached US$1.15 billion, up $250 million against last month.

The recovery of the local real estate market and the amended Housing Law that allows foreigners and overseas Vietnamese to own houses in Viet Nam are also important factors likely to motivate overseas Vietnamese to transfer their money here. — Photo hungthinh.net.vn

Deputy Director of the State Bank of Viet Nams HCM City branch Nguyen Hoang Minh said there was no leap in the remittances to HCM City in the first three months, as dollar holders were still waiting to see the consequences of the central banks recent policies before deciding on channels to invest in, Minh said.

The central bank has adopted some new policies this year, including the application of the daily reference exchange rate and the reduction of dollar deposit interest to zero per cent.

Last year, HCM City, which is one of the top localities nationwide receiving the largest volume of remittances, received roughly $5.5 billion in remittances, inching up against its $5.2 billion of 2014. More than 70.8 per cent of the remittance value flowed to production and business, while roughly 21.6 per cent poured into real estate and 7 per cent was for relatives.

However, after a good year in 2015, several experts say they are not so confident that remittances will be stable in the upcoming months and years.

According to experts, the US Federal Reserve is likely to continue implementing its roadmap to increase the interest rate on the greenback, affecting the dong-dollar exchange rate.

This would make overseas Vietnamese reluctant to transfertheir savings to the country, since they would receive fewer benefits from the transfers, except in cases where they are investing in projects with high returns.

However, some experts have expressed a contrary opinion, saying a significant growth in remittances is likely this year.

They said the forex rate betweendongand dollar will likely increase by three or five per cent this year, thus encouraging overseas Vietnamese to transfer more of their savings to Viet Nam to enjoy the benefits of a favourable exchange rate.

Besides this, the clear recovery of the local real estate market and the amended Housing Law that allows foreigners and overseas Vietnamese to own houses in Viet Nam are also important factors likely to motivate overseas Vietnamese to transfer their money here, they said.