- Vietnamese banks race to cash in on surging remittances before Lunar New Year
- 130,000 overseas Vietnamese to return home for Tet holiday
- Ho Chi Minh City remittances set to fall 9 percent in 2016: central bank
- The changing role of overseas remittances in Vietnam's economy
Overseas remittances to Vietnam witnessed a fall in the past year, and the trend could continue due to tighter U.S. immigration policies, according to a recent report issued by Credit Suisse.
Remittances inflows to Vietnam have grown consistently since 2010 and hit a record of $13.2 billion in 2015 before falling by about 33 percent last year.
The decline in remittances mainly resulted from Vietnam cutting interest on foreign currency savings to around 0 percent from the beginning of the year. Lower yields offer less incentive for sending money back, economist Nguyen Minh Phong told AP.
Half of overseas Vietnamese reside in the U.S., according to official data. As such, around 60 percent of Vietnam's remittances come from the U.S., a contribution that represents 4 percent of the country’s GDP in 2016.
Tighter border controls imposed by the Trump Administration could literally decimate remittances, Credit Suisse warned in a new report.
Vietnam is not the only one affected by such changes, the Philippines and India stand to suffer as well.
“We [Credit Suisse] see this risk particularly pronounced in the Philippines and Vietnam – the former could see its current account surplus disappear,” Credit Suisse said in the report.
In 2015, the Philippines and Vietnam were the top destinations for U.S. remittances bound for the East Asia and Pacific region, but the future looks bleak for both countries.
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