VietNamNet Bridge - The exchange market has been more peaceful than ever in the last 10 months with excess liquidity, stable exchange rates and record-high foreign exchange reserves of $40 billion, the highest level so far. No devaluation and no considerable price fluctuation have been reported in the last 10 months. The current situation is different from this time last year, when the dong/dollar exchange rate was under pressure following the Chinese government's devaluing the Chinese yuan. Anh Mai, the owner of a gold shop on Bui Thi Xuan street in Hanoi, said that investors should not expect fat profits this year because there was no ‘strong wave’ in the market. “The gold price increased for a very short time in July as a result of Brexit. The dollar price increased modestly by tens of dong per dollar to VND22,380 per dollar." When asked if they should continue holding dollars, Mai said it would be better to sell dollars for Vietnam dong to deposit at banks.No … [Read more...] about Exchange market peaceful, stable exchange rate beneficial to economy
Stable exchange rate
The State Bank of Vietnam (SBV) does not plan to adjust the dong/dollar exchange rate now because this would place a heavier burden of foreign debt on the government and businesses. No official document has been released about the money Vietnam paid in 2014 for foreign debt or the amount needed to pay in 2015. The government’s reports to the National Assembly on the allocation of foreign debts, public debt management, debt payment and the 2015 state budget estimates did not show the figures. The reports said that Vietnam would have to pay VND150 trillion in 2015 for aid and debt, with no detailed figures about the payment for domestic debt and foreign debt and the ratio of the payment on the total state budget revenue. The most updated figure is about foreign debt payment obligations in 2014. A government report in May 2014 showed that in 2013, the government had to pay $1.703 billion in foreign debt, or VND35.682 trillion, if considering the exchange rate at that … [Read more...] about Will a stable exchange rate ease the foreign-debt burden?
Banking authorities are working hard to make sure the foreign currency market runs smoothly. For example, Binh Son Refining and Petrochemical Company Limited (BSR) deputy chairman Pham Dang Nam is one business chief happy with the market's performance. "Our company heavily depends on the [dong-US dollar] exchange rate situation, so that when the governor affirmed of exchange rate stability in 2013 we are happy," he said. BSR is responsible for the management of Quang Ngai province's Dung Quat oil refinery, Vietnam's first. The refinery's annual revenue exceeds VND100 trillion, with around 90 per cent of expenditure in US dollars. Each month, the plant needs $210 million to cover diverse expenses. In 2010, BSR incurred losses associated with exchange rate amounting to VND778 billion ($37.4 million) in 2010, roaring to VND4.1 trillion ($197 million) in 2011 when the VND lost 9.3 per cent against the US dollar. Last year, such loss fell to VND75 billion ($3.6 million) thanks to a stable … [Read more...] about Stable exchange rates key
The State Bank of Vietnam said it will keep the exchange rate stable, even as the dong has showed signs of weakening due to increasing dollar purchases for import and debt payments. The central bank said last week it aims to keep the rate stable until the end of the year, preventing a rise of more than 1 percent. It also ordered commercial lenders to control lending in foreign currencies. The central bank lowered its daily reference rate to 20,648 per dollar on Thursday, down from 20,638 on Wednesday. The move was the second rate cut in a row after the mid-point was lowered from 20,628 on Tuesday. The rate had been left unchanged since August 24. Following the adjustments, the dong dropped on both the official and the so-called black market. Vietcombank quoted the dollar at VND20,860 on Sunday, compared to 20,834 a month ago. A major gold trader in Hanoi said recent fluctuations on the gold market added a lot of pressure on the exchange rate. He said Vietnam spent US$1.5 … [Read more...] about Vietnam central bank pledges stable exchange rate
Vietnam’s three-year bonds rose on Wednesday, driving down yields to a two-week low, on speculation efforts by the central bank to promote a stable currency will boost demand from foreign investors. The nation’s currency is allowed to trade as much as 1 percent on either side of a daily reference rate, which has been kept at 20,828 per dollar since Dec. 26. Inflation slowed to an annualized 5.35 percent in July, the least since November 2009, the General Statistics Office in Hanoi reported on Tuesday. “Foreign investors probably have a more positive view of the Vietnamese economy,” said Ha Thi Quynh Trang, a Hanoi-based fixed-income trader at Bank for Investment & Development of Vietnam. “If the exchange rate remains stable toward the end of the year, more foreign investors will participate in the bond market.” The yield on three-year notes fell four basis points, or 0.04 percentage point, to 9.72 percent, the lowest level since July … [Read more...] about Vietnam bonds rise as stable exchange rate boosts foreign demand