Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam (SBV) Ho Chi Minh City Branch - one of the two units directly involved in drafting the remittance policy in the city for the period 2024 - 2030, discussed with reporters of the Lao Dong Newspaper about the policy of attracting "golden resources" to develop the socio-economy of Ho Chi Minh City and the whole country.
Reporter: Ho Chi Minh City is currently the leading locality in the country in attracting remittances. How has this resource contributed to the city's economy, sir?
- Mr. NGUYEN DUC LENH: According to statistical reports, except for periods of economic crisis or the COVID-19 pandemic, remittances to the city in recent years have continuously tended to increase.
In the first 6 months of 2024, remittances reached 5.178 billion USD, an increase of 19.5% over the same period. This source of money, along with other capital flows, has become an important resource for the economic recovery and development of the country in general and Ho Chi Minh City in particular in recent times. In the first 7 months of the year, through the use of remittances, production - business, investment and consumption activities all grew.
The project's goal is to attract and effectively promote remittance resources in socio-economic development. Photo: LAM GIANG
In terms of policy, remittances have contributed to increasing the supply of foreign currency for the economy, creating favorable conditions to support and improve the effectiveness of the State Bank's monetary policy, stabilizing the macro-economy and curbing inflation, reducing pressure on exchange rates. At the same time, ensuring the maintenance of a reasonable relationship between interest rates and exchange rates, stabilizing the value of the dong, while still meeting the requirements of supporting import-export and economic growth.
Directly participating in the project related to remittance policy, what solutions has the State Bank of Vietnam, Ho Chi Minh City Branch, developed and implemented to attract and direct this capital flow into the economic development of Ho Chi Minh City and the whole country?
- Remittances are called "golden resources" because they are a very special source of foreign currency, such as not having to be repaid or paid interest; fully meeting credit conditions and conditions for capital use like other sources of capital (loans, foreign investment capital, etc.). In that sense, if exploited and used effectively, remittances will become a "golden resource" contributing to the growth and socio-economic development of the country.
In implementing the project, with tasks related to banking activities, we will focus on expanding and improving the quality of remittance payment services for beneficiaries; advising on mechanisms, policies, and solutions to attract remittance resources and coordinating to do well in information and communication work, administrative reform, and improving the investment and business environment. In particular, coordinating to implement solutions on focusing and encouraging the use of remittances in socio-economic development programs and projects in the area.
.The project on remittance policy of Ho Chi Minh City is built with the spirit of not intervening by administrative measures in the transfer and receipt of money, but mainly orienting this resource into the production and business sector. Can you explain this more clearly?
- That's right. The project's goal is to attract and effectively promote remittance resources for socio-economic development. Therefore, the project has proposed solutions to improve the investment and business environment. The project encourages the effective use of remittance resources through economic tools in a scientific manner, in accordance with economic laws and market mechanisms, ensuring the rights and interests of the people while bringing greater economic efficiency.
In its role of implementing remittance policies and providing remittance payment products and services, the Ho Chi Minh City banking sector will focus on doing this task well, while coordinating with relevant departments and agencies to implement other solutions of the project. We will also advise on solutions and pilot models to encourage and focus remittance resources on socio-economic development to bring about greater economic efficiency. However, this will take time.
The immediate and short-term task is to coordinate information dissemination about the project so that people and overseas Vietnamese can have a more complete understanding of remittances and use them in the most effective and practical way. Credit institutions and remittance companies will grasp and carry out their responsibilities and tasks in remittance activities to effectively implement the solutions assigned by the project to the city's banking sector.
According to you, should we research and compile statistics on where remittances have been and are going, in order to find appropriate solutions to "straighten the flow"?
- In terms of theory and the nature of remittances as well as the role of this resource, the use of remittances by people and beneficiaries for production - business, investment or consumption for daily life... all contribute to bringing about efficiency for the economy - society, through stimulating and increasing aggregate demand and increasing consumption.
However, if the investment and business environment is favorable, with many options for investment or production and business to bring higher efficiency, it will stimulate and attract remittance resources to invest in production and business or use them for a project or field. At that time, remittance resources will be used in a concentrated manner and bring greater and more effective benefits.
With that in mind, it is necessary to research and compile statistics on how remittances are actually used and what specific areas they are focused on. Based on that, the authorities will have solutions and directions for the effective use of remittances.
(*) See Lao Dong Newspaper from issue dated August 27
Increase confidence for overseas Vietnamese
According to a representative of the Bank for Foreign Trade of Vietnam (Vietcombank), the increasing amount of remittances sent to Vietnam has helped support foreign currency flows, maintain stable exchange rates and facilitate the implementation of foreign exchange policies. This is also a financial source for overseas Vietnamese to support relatives in Vietnam to serve their lives and other business activities. In the first 7 months of this year, remittances sent through Vietcombank reached approximately 2.4 billion USD (up 25% over the same period last year), and are expected to reach about 4 billion USD for the whole year.
The number of Vietnamese people going abroad to work and study is increasing, creating a large demand for sending money back to Vietnam for various purposes, such as paying off bank debts, supporting relatives, investing in real estate and other business activities. To attract this "golden resource", Vietcombank has implemented many programs with preferential policies, especially at the end of the lunar year, when overseas Vietnamese need to send money back to support relatives in spending or investing.
"In addition to preferential policies and products to attract remittances from commercial banks, to attract and mobilize this resource, there needs to be more positive policies to increase the confidence of overseas Vietnamese, while continuing to maintain macroeconomic stability, curb inflation, and change the investment environment in a positive direction" - Vietcombank representative acknowledged.
Source: https://nld.com.vn/tp-hcm-lap-de-an-nan-dong-kieu-hoi-khong-can-thiep-bang-bien-phap-hanh-chinh-196240827213541351.htm
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