VietNamNet Bridge – Vietnam dong has big advantages over other investment channels at this moment. Keeping dong is the top choice for Vietnamese people because this allows to preserve their assets.
Investors believe that in the context of the bad performance of the world and national economies, the liquidity, not the expected profit, should be considered as the most important thing for them to consider when making investment decisions.
MAY 20, 2012
VietFinanceNews.com – The Vietnamese dong currency is rising, so exchange rate adjustments may be in store, said economic experts of the National Institute for Finance at a conference in Hanoi last week.
According to analyses by experts, the dong has strengthened by 23.8% against the U.S. dollar and by 5.7% against the basket of currencies of the country’s major trading partners. (more…)
VietFinanceNews.com – The Vietnamese dong currency is rising, so exchange rate adjustments may be in store, said economic experts of the National Institute for Finance at a conference in Hanoi last week.
According to analyses by experts, the dong has strengthened by 23.8% against the U.S. dollar and by 5.7% against the basket of currencies of the country’s major trading partners. (more…)
MAY 13, 2012
VietFinanceNews.com – The Vietnamese currency, the Vietnam dong, is increasing in value, said a research team of the Institute for Financial Strategies and Policies under the Ministry of Finance at a recent conference.
By the end of 2011, the dong appreciated 23.8 percent and 5.7 percent against the US dollar and a “basket” of foreign currencies of other trading partners, said the team at “Coordination of fiscal and monetary policies in macroeconomic regulation” conference held by the ministry in Hanoi. (more…)
VietFinanceNews.com – After sending a consultative task force to Vietnam in March, the International Monetary Fund (IMF) said the Vietnamese Government’s macro-economy stabilising policies have started to yield high effect, with quickly decreasing inflation, trade deficit and pressure on VND.
IMF welcomed the State Bank of Vietnam, the central bank, which has recently increased foreign reserves considerably. The fund also supported the central bank’s policy of limiting the VND devaluation at 2-3% till the year-end. (more…)
APRIL 16, 2012
VietFinanceNews.com – We seem to be going through another one of those periods when almost everyone you meet, especially in the bars, is talking Vietnam down and being negative.
However, there is a difference this time. In my 20 plus years here, the Vietnamese have never been negative or pessimistic, but today they seem to be adopting the negative sentiment. (more…)
VietFinanceNews.com – The widespread public debt crisis threatens not only such major economies as the US, EU, and Japan but also many other countries that have established commercial ties with them.
Dr Nguyen Thanh Do, Head of the Department of Debt Management & External Finance under the Ministry of Finance, granted an interview to VOV on this issue.
What aspects of the Vietnamese economy will be affected by the public debt situation in the US, EU and Japan? (more…)
VietFinanceNews.com – The State Bank of Vietnam, the country’s central bank, sent official dispatches, requesting credit institutions to strictly implement Decree No. 95 on gold and foreign exchange trading and asked support from four related Ministries on Oct 25.
The central bank asked credit institutions and branches of foreign banks to strictly follow the new regulations on foreign exchange control and gold trading management, actively detect and report violations. (more…)
VietFinanceNews.com – The former State Bank of Viet Nam Governor Le Duc Thuy discusses the causes of high interest rates and the weakening dong with Vietnamese reporters on the sidelines of an economic conference on Tuesday.
What is your reaction to the fluctuations in the foreign exchange rate in recent weeks?
VietFinanceNews.com – Experts all believe that the decision by the State Bank of Vietnam to adjust the interbank exchange rate by another 10 dong per dollar to 20,678 dong per dollar is a “reasonable, flexible and timely” move. The devaluation has been made after the State Bank announced that the exchange rate adjustment, if it is made, will not be higher than one percent by the end of 2011.
After keeping the dong/dollar exchange rate stable for more than one month, the State Bank of Vietnam has been adjusting the exchange rate continuously since the beginning of October. To date, the dollar price has appreciated by 50 dong per dollar in comparison with September, or 0.24 percent.
VietFinanceNews.com – The State Bank of Viet Nam yesterday announced an increase in the interbank exchange rate to VND20,668 per dollar, VND15 higher than that of Monday and the fourth increase since last Wednesday.
Driven by the State Bank move, commercial bank forex rates soared accordingly, Vietcombank posting a VND20,875 – VND20,870 per dollar sell/buy, an increase of VND15 and VND14 per dollar.
Several other banks including, Asia Commercial Bank and Eximbank, also increased their forex rates to selling prices of VND20,875 per dollar and buying prices of VND20,853 – VND20,855.
On the black market however, greenbacks settled on VND21,250 – VND21,280 (buying/selling) yesterday, a decrease of VND100 per dollar.
On the domestic market, the price of gold increased significantly due to increased world prices and the hike of forex rates announced by the SBV.
At 12pm yesterday, gold shop Phu Quy on Tran Nhan Tong Street, Ha Noi, posted buy/sell prices of SJC gold at VND43.8 million (US$2,105.77) – VND44.03 million ($2,116.83) per tael (one tael being equivalent to 1.2 ounces), VND500,000 higher than on Monday.
At the same time, the spot world price on the London Bullion Market was $1,679 per ounce.
Last Wednesday, the central bank said it would continue selling US dollars to cool down the domestic foreign exchange market, ensuring that the value of the domestic currency would not fall by more than 1 per cent against the dollar between now and the end of the year.
If the Vietnamese dong was to devalue by 1 per cent, the forex rate would be VND20,834 per dollar. Thus far, the adjustment had reached 0.2 per cent, experts said.
Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said that higher exchange rate pressure would overshadow the rest of the year.
Senior economist Tran Hoang Ngan said that, as the adjustment still fell below 1 per cent as set by the central bank, there was no need to be worried.
He added that the inter-bank rate increase was a way of managing exchange rates flexibly to create market stability, saying there was no reason for devaluating the domestic currency as inflation had been under control and demand and supply for foreign currencies were stable.
On Monday, the central bank allowed two more banks to sell gold, alongside Sai Gon Jewellery Ltd Company (SJC) and five other banks including DongA Bank, ACB, Techcombank, Eximbank and Sacombank, to stabilise the chaotic domestic market for gold. These banks are set to also re-open their foreign gold trading accounts.
VietFinanceNews.com – The big differential between local and international gold prices – at some US$1 million a tael now – has exerted little pressure on the exchange rate at home, but many experts still predict forex volatility at the year’s end.
The inter-bank exchange rate on Monday was still maintained by the central bank at VND20,628, allowing banks to quote the U.S. dollar at a maximum VND20,834 given the trading band of 1%. The dollar on the unofficial market on Monday afternoon traded at VND21,040-VND21,090, a slight fall of VND10 against last weekend.
However, experts all agreed that the pressure on the exchange rate will be high at the end of the year due to the rising need for the greenback among enterprises at the time coupled with a possible rise in trade deficit.
VietFinanceNews.com – Vietnam should avoid reducing interest rates too soon as that may weaken its currency and raise questions about the government’s commitment to fighting inflation, the International Monetary Fund said.
“It is important that monetary policy not be eased prematurely, because the recent improved sentiment towards the dong remains relatively fragile,” Benedict Bingham, the IMF’s senior resident representative in Vietnam, said in an e-mail today. His comments are a summary of remarks he made at a Sept. 6 meeting in Hanoi attended by officials including Prime Minister Nguyen Tan Dung.
VietFinanceNews.com – Vietnam’s central bank has been selling U.S. dollars to banks in recent weeks to support the weak dong , which has come under pressure since early August following months of stability, market sources said.
The State Bank of Vietnam (SBV) has sold an estimated $1.5 billion to five or six large state-run and partly-private banks since mid-August, two sources who closely follow the Vietnamese currency market estimated.
Two other sources declined to estimate the total value of the intervention but said some banks had been sold between $15 million and $35 million a day over about three weeks.
Intervention in the currency market is not unprecedented for the SBV, but past attempts have proven ineffective at sustainably supporting the dong, which has fallen by more than 20 percent against the dollar since mid-2008.
VietFinanceNews.com – Though applauding the decision by the State Bank of Vietnam to require higher compulsory reserve ratio for foreign currency deposits, bankers still have doubts that the decision would be able to ease the demand for dollar loans.
The State Bank of Vietnam has decided to raise the compulsory reserve ratio for the deposits in foreign currency by one percent. Explaining the decision, the central bank said that it aims to restrict the foreign currency credit growth in order to stabilize the monetary and the foreign currency markets.
With the new decision, the compulsory reserve ratio for demand deposits and the fixed term less-than-12-month deposits is 8 percent from September 1, instead of 7 percent as previously applied. Meanwhile, the six percent compulsory reserve ratio will be applied for the deposits with the term of 12 months of more.
Travelex Reports on Locations Offering “Best Bang for Your Buck”
NEW YORK, Sep 01, 2011 (MARKETWIRE via COMTEX) — According to a recent assessment by Travelex, the U.S. dollar has strengthened against the currencies of Turkey, Vietnam, Egypt and Argentina, among other top destinations for U.S. travelers. As the world’s largest non-bank foreign currency provider, Travelex constantly monitors exchange rates and is therefore able to determine which overseas destinations are offering the greatest value at any given time.
The Turkish Lira, for example, experienced a year-over-year change of almost 14 percent, which means a visitor to the Eurasian country would receive 14 percent more for his or her currency this year compared to last year. The Vietnamese Dong, Egyptian Pound and Argentinian Peso are also offering a better bargain for U.S. travelers in 2011, with year-over-year percent changes ranging from approximately five to seven percent.
VietFinanceNews.com – The State Bank of Vietnam said it will keep the U.S. dollar-Vietnamese dong exchange rate within a 1% band until the end of the year.
It also said in a statement late Monday that the country may record a current account surplus of $2.5 billion to $4.5 billion for 2011, adding that foreign currency reserves have risen significantly recently.
“In all circumstances, the central bank will be able to stabilize the exchange rate and the foreign exchange market,” the central bank said in the statement.
VietFinanceNews.com – Reducing Vietnam’s lending interest rate, stabilising the VND/USD exchange rate and consolidating the bulky system of credit institutions are all high on newly-elected State Bank Governor Nguyen Van Binh’s agenda.
VIR’s Nguyen Hanh talks with banking and financial expert Dr. Nguyen Tri Hieu to find out how Binh can approach these tasks.
Bankers and enterprises now have their sights firmly set on the lending interest rate after Binh promised to bring the rates down to 17-19 per cent in September. Can the governor make good on his promise?
VietFinanceNews.com – The importance of keeping exchange rates under control to stabilise domestic gold prices in line with the world market has never been more pertinent.
In recent days, gold prices have hit record highs in both Asian and global markets. Vietnam’s gold market has also experienced wild fluctuations, forcing the State Bank of Vietnam (SBV) to import a large volume of gold.
In the current context, soaring gold prices have brought pressure to bear upon the exchange rate between the Vietnam dong (VND) and the US dollar (USD).
Unrelenting pressure
According to economists, there are three main factors, namely the impact of the gold market, high foreign currency credit, and growing demand for foreign currency before the end of the year. The current ”gold fever” in the domestic market, in part, contributes to the increasing exchange rate between the VND and USD, even though it remained rather stable in the past three months. On August 24, the Vietnam Bank for Foreign Trade (Vietcombank) announced the exchange rate at VND20,830-20,834/USD, up more than VND30/USD compared to the previous day.
Dr. Le Tham Duong, head of the business administration faculty of Ho Chi Minh City Bank University, says that the recent import of gold has led to an increase in the import surplus and the value of the US dollar.
Dr. Duong says that Vietnam has imported three tonnes of gold despite wild fluctuations in the world market.
Economists say that the foreign currency market is likely to face a difficult time as many businesses have to pay their loans in USD in the coming months.
The SBV’s recent statistics show that foreign currency credit in June rose by more than 23 percent, while VND credit only saw a 3-percent increase.
General Secretary of the Vietnam Bank Association, Duong Thu Huong, says there will be a high demand for USD in the next few months.
Her view is shared by financial specialist Nguyen Tri Hieu, who says that businesses will buy a large amount of USD to pay off their bank loans. They will also borrow USD from banks, change it into VND, and then send the money back to banks to enjoy higher interest rates. As a result, commercial banks will also buy USD to meet the increasing customer demand. All these will raise the value of US dollar.
Stabilising the value of VND
Judging from Vietnam’s overall balance of payment in 2011, which show an estimated surplus of US$2.5-4.5 billion, the SBV has announced its plan to stabilize the VND-USD exchange rate.
Dr. Nguyen Thi Mui, member of the National Advisory Council for Monetary Policy, notes that there is a big gap between supply and demand for USD and Vietnam’s import surplus will remain high. It is essential to keep a balance between supply and demand while restoring investors’ trust in VND, Dr. Mui says.
Many people and businesses are worried about the current trade deficit, high interest rates and foreign exchange rates. To ease their minds, the SBV has purchased over US$6 billion.
August 26 2011
VietFinanceNews.com – Deputy Prime Minister Vu Van Ninh urged the State Bank of Vietnam (SBV) to take a proactive and flexible monetary policy while working with the bank on August 25.
The Deputy PM spoke highly of the outcomes of the SBV’s move to manage the monetary policy over the past time and gradually reduce gold price and stabilise foreign exchange rate.
He also recorded positive changes in the credit structure with banks prioritising capital for agriculture and rural areas.
Central bank raises US dollar prices
VietFinanceNews.com – The State Bank of Vietnam (SBV) on Wednesday raised the interbank average forex rate by VND10 to VND20,628 a US dollar after keeping it stable for 14 consecutive days since August 10.
This is the second hike this month after the VND10 a dollar rise on August 9 when the central bank officially approved the imports of 5 tons of gold to cool down the domestic market, extending the dong fall of 0.97 percent so far in August.
The bid and ask forex rate at the central bank’s transaction office today is VND20,600 and VND20,924 a US dollar, up 10 dong in the selling price and remaining unchanged for the buying price from yesterday.
Vietnam's bank notes
VietFinanceNews.com – The State Bank of Vietnam plans to increase the value of the Vietnamese dong against the US dollar over the next four months in a bid to protect the value of the domestic currency, State Bank Governor Nguyen Van Binh told Sai Gon Economic Times this week.
“Since February, the real value of Vietnamese dong has risen slightly,” Binh said.
“If necessary, the central bank will consider further adjustment of the exchange rate,” he added. “The primary target of foreign exchange policy is to stabilise the dong and keep it under control, not to fix it. Confidence in the domestic currency has been fading and we must immediately restore that confidence, which is vital to economic stability.”
Binh advised the public that holding onto the dong was the best policy to keep people from flocking to invest in gold and to reduce dollarisation of the economy.
HANOI Aug 11 (Reuters) – Vietnam’s central bank wants to keep fluctuations in the dong to a minimum for the rest of this year, seeing its present value against the dollar as realistic, a state-run newspaper reported on Thursday.
“In the event that the State Bank sees the necessity to adjust the exchange rate, we will adjust the rate by no more than 1 percent between now and the year-end,” Governor Nguyen Van Binh told the Saigon Times Online newspaper (www.thesaigontimes.vn).
Read More: http://af.reuters.com/article/commoditiesNews/idAFL3E7JB0HW20110811
Vietnam to Avoid Dong Surplus , Binh Says on Vietnam Television
August 4 2011
VietFinanceNews.com – Vietnam aims to encourage greater domestic use of the dong rather than the dollar and avoid a surplus of local currency, State Bank of Vietnam Governor Nguyen Van Binh said in an interview on Vietnam Television today.
The bank will set interest rates for the dong and the dollar at a reasonable level to ensure sufficient supply and prevent speculation, Binh said in the interview.
With these measures, the dong’s exchange rate to the dollar should stay stable until year-end, Binh told Vietnam Television.
VietFinanceNews.com – The demand for the U.S. dollar is outpacing supply, unveiling big foreign exchange risks for both enterprises and the economy by the end of the year, experts said at a conference in HCMC last week.
Le Xuan Nghia, vice chairman of the National Financial Supervisory Committee, told the conference on Thursday that dollar supply was ample now as borrowers converted their dollar debts to Vietnam dong funds. But the risk is embedded in such a situation and will pose a big risk when such debts become due by around the end of the year, he said.
VietFinanceNews.com – The State Bank of Vietnam has purchased USD4.8 billion since the beginning of the year, Governor Nguyen Van Giau has revealed.
A report by the Government, sent to National Assembly deputies who are meeting today and which did not state when the dollars were purchased, said there had been an improvement in national foreign reserves since the beginning of the year.
Last June, Giau said: “Foreign reserves have increased sharply over the past two months.”
VietFinanceNews.com – Vietnam, which is battling high inflation and other economic problems, has added nearly $4 billion this year to its foreign reserves, a government report on Thursday said.
The State Bank of Vietnam will further increase reserves by the end of 2011, the report to the National Assembly by Deputy Prime Minister Nguyen Sinh Hung said, without giving the current level of reserves.
According to the Asian Development Bank, Vietnam’s foreign reserves were $12.4 billion at the end of 2010.
In recent years, Vietnam’s reserves have declined.
VietFinanceNews.com – The Vietnamese central bank’s decision to cut its repurchase rate last week may call into question the government’s determination to fight inflation, the International Monetary Fund said.
The State Bank of Vietnam lowered the repo rate for the seven-day term on July 4 to 14 percent from 15 percent. The central bank had boosted it from 7 percent at the start of November 2010. The rate appears to have become the benchmark for monetary policy, according to JPMorgan Chase & Co.
VietFinanceNews.com – Vietnamese inflation will be higher next year than previously forecast as a result of a central bank rate cut this week that was “premature” and may confuse investors, Credit Suisse Group AG (CSGN) said.
The State Bank of Vietnam on July 4 lowered its repurchase rate to 14 percent from 15 percent. The cut was the first this year for the repurchase rate, which was 10 percent in January. The repurchase rate appears to have become Vietnam’s benchmark for monetary policy, JPMorgan Chase & Co. (JPM) said in March.
VietFinanceNews.com – Although the foreign exchange rate has been stable for two months now under positive impact of the central bank’s monetary policy, experts say pressure is still piling on the forex rate in the near term.
HSBC in its recent Asia Economics Third Quarter 2011 said the persistently large trade deficit is on the list of economic concerns in Vietnam, with the aggregate shortfall in the first five months 19% higher than a year ago. Such a wide trade deficit will adversely affect the rate, the bank says in its report and expects the forex rate will be VND21,500 to the dollar by the year’s end compared to the current VND20,620 at banks.
