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now that is a nice currency exchange.
I can remember the peso being about 30:1, and now it is 15. That does not say much for the dollar. I know VND is about 21,000:1 or so. Really nice to go to that beautiful country and climb around the tunnels in Chi town and visit Saigon. I was with my wife over there visiting for over 2 weeks, other than the 24++ hour flight it was awesome.
this is one of few where dollars go that long. mexico said to be 15 to 1.
thank you for sharing.
we you by your self?
I visited Vietnam earlier this year it was a beautiful country and the currency goes a LONG ways. Heck I had a massage a day at $1 USD....you can not beat that for 45 minutes of paradise. I for one want to go back. Lets face it, the Dong goes alot further than our dollars.
i here going to do some nam stuff on hbo soon. maybe done some.
Interesting read, thanks PK. I hope that you are doing great with all your investments. Enjoy the rest of the weekend.
Vietnam to Devalue Dong 3.4%
By NGUYEN PHAM MUOI And PATRICK BARTA
HANOI—Vietnam said it will devalue its currency for the second time in less than three months as the Southeast Asian nation continues to struggle with a hangover from economic volatility during the past two years.
An increasingly popular destination for Western capital, Vietnam continued to post strong growth rates even through the dark days of last year's global recession. But economists say the country's strong recent performance–including growth of roughly 5.5% in 2009, according to the World Bank—masks serious underlying problems including a large trade deficit, high inflation and a shortage of U.S. dollars needed to keep the financial sector humming.
All that has put severe pressure on the Vietnamese dong as local residents lose confidence in their currency. By contrast, some other Asian countries have seen their currencies rise recently, as their economies regain their footing after the latest global financial crisis.
The State Bank of Vietnam, the country's central bank, said Wednesday it will devalue the Vietnamese dong by 3.4% effective Thursday. That comes on top of a 5% devaluation in November and two other devaluations since June 2008. Now, one U.S. dollar will buy 18,544 dong, compared to 17,941 dong earlier in the week.
The central bank on Wednesday also imposed a 1% ceiling on interest rates on dollar deposits at banks by "economic institutions," not including credit institutions, to try to flush more greenbacks into the market.
The devaluation will help make Vietnam's key exports, which include shoes, coffee and rice, cheaper than those of many other Asian countries, potentially improving its relative position in global trade. That could increase tensions with some neighbors, especially Thailand, with which it competes heavily in global markets. Thailand has already complained that some currencies in the region, including the Chinese yuan, may be undervalued.
But it's unclear whether the devaluation will be enough to ease the tensions in Vietnam's economy. The problems stem in part from imbalances lingering from Vietnam's years of rapid expansion from 2000 to 2007, when gross domestic product grew an average of 7.5% a year and inflation got out of control, reaching a peak of 28% in August 2008.
Although the global credit crunch helped ease inflation, it dented foreign direct investment in Vietnam and pushed exports into a slump, swelling the country's trade deficit and exposing its over-reliance on overseas markets. Vietnam estimated its trade deficit in January was $1.3 billion, with imports leaping 87% and exports rising 28%.
Inflation, meanwhile, has shown signs of returning: January inflation was 7.62%, exceeding a government target for the whole year of 7%.
Many Vietnamese residents have responded by hoarding dollars out of fear the dong will become even less valuable in the future.
The non-convertible Vietnamese currency is allowed to trade within a band of 3% on either side of the midpoint the central bank sets daily. However, it has been beyond the band's weak end on unofficial markets for more than a year – an indication of residents' lack of confidence in the dong.
On the unofficial market, such as in gold shops that double as foreign-exchange dealers in Vietnam, one dollar was buying 19,180 dong earlier on Wednesday.
The latest devaluation comes just days before the Lunar New Year festival, or Tet, which is Vietnam's biggest holiday, a time when cash is in demand and bank liquidity is under pressure.
Did you find anything about your Devalue? Just curious, I wish you the very best with this and all other investments.
Hey bud, can you
contact me please
407-660-0454
VND to the USD converter!
http://finance.yahoo.com/currency/convert?amt=1&from=USD&to=VND
NOT TODAY!!!!!!!!!!!THE VND IS RECOVERING AGAINST THE U S DOLLAR LOOK. FINALLY WE MIGHT SEE SOMETHING GOOD COME OUR WAY!!!!!!!!!!!!!
http://finance.yahoo.com/q/bc?s=USDVND=X&t=5d&l=on&z=m&q=l&c=
That will never happen. After all our Government has lied to us for years. What makes us think they are going to change now.
Watch #9
Main Keys:
1 -
I see this currency continues to plummet. I guess it shows dilution is NEVER a good thing. No matter if in stocks or currency. I just wish the govt would use what they have, rather than printing more. Hmmmm??
vnd 17450 12/26/08 wow wrong way
17200 vnd = $1 usd ..it is the u s dollar doing too well versus the vnd doing so so.
Vietnam not doing too well?
Wow a whopping $57.per million Dong. DUMP them ASAP
17348 vnd to one dollar now
Dec 1, 2008
SBV Sets USD/VND Exchange Rate At 16,481on Dec 01
Official USD/VND rate: 16,481 -2
Vietcombank buys at : 16,970 unch
Gold shops buy at : 17,200 +20
Vietnam's central bank set the dollar's exchange rate lower at VND16,481 Monday.
The state-owned Vietcombank bought the dollar unchanged at VND16,970. It sold at VND16,975, compared with VND16,977 Friday.
Gold shops bought higher at VND17,200 and sold higher at VND17,250, compared with VND17,220 Friday.
Dealers said they expect the rate to stay little changed this week on weak dollar demand. (Dow Jones)
Nov 1, 2008
Bonds rise, capping fourth monthly gain; dong advances
Five-year bonds rose Friday, completing a fourth straight monthly gain, as high interest rates deterred borrowing, prompting banks to steer funds into government debt. The dong advanced, paring its October loss.
The yield on the benchmark note dropped 35 basis points in October to 15.52%, from 15.87% September, according to a daily fixing price from 10 banks compiled by Bloomberg. A percentage point consists of 100 basis points.
“Banks have had a surplus of cash as companies are not borrowing because of high interest rates,” Vu Thanh Tu Anh, director of research of the Fulbright Economic Teaching Program in Ho Chi Minh City, said. “They are putting money in government bonds so demand for the note has increased.”
Slowing inflation and the prospect of interest-rate cuts are also helping boost demand for bonds.
Consumer prices decreased 0.2% in October, the first decline in more than a year and a half. The central bank’s benchmark interest rate, which was cut by a percent to 13% on October 20, is still the highest in Asia, along with Pakistan’s.
The currency weakened by 1.4% this month, the biggest monthly drop since June. The dong traded at 16,830 per dollar as of 4:18 p.m. in Hanoi Friday, compared with 16,837 late Thursday and 16,600 at the end of September, according to data compiled by Bloomberg.
The State Bank of Viet Nam fixed the reference rate at VND16,511, compared with VND16,512 Thursday, according to its website. The currency is allowed to trade by up to 2% on either side of the official rate. (Bloomberg)
http://www.vnstocknews.com/2008/11/bonds-rise-capping-fourth-monthly-gain.html
Same here.lol well what's in store for it in 09. Only Time will tell.
Me too! still holding though. :-/
Yea , It's supposed to be LESS DONG for MORE DOLLAR. I'M FEED UP WITH BOTH-the DONG and DINAR.
That's the wrong way.
Currency Converter Results
Monday, October 27, 2008
1000000 Vietnamese Dong(s) = 59.3613 US Dollar(s)
1 USD = 16846 VND
1 VND = 5.93613e-05 USD
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Thomson Financial News
UPDATE 1-Vietnam Money-Dong falls as investors seek dollars
10.27.08, 4:38 AM ET
HANOI, Oct 27 (Reuters) - The Vietnamese dong may fall to 17,000 per dollar soon due to strong demand for the U.S. currency from importers and equity investors, bankers said.
'The rise in the dollar against the dong is not abnormal and is not synonymous with a deep depreciation in the dong,' Doan Huu Tue, of the central bank's banking development strategy department, was quoted as saying in a government monetary market report.
'After balancing export-import targets, a reasonable exchange rate could be at a level of 17,000 dong to a dollar.'
He did not say when that level might be reached. On Monday, the central bank set the mid-rate for interbank transactions at 16,517 dong per dollar, little changed from a month ago.
'Apart from the usual dollar requirement from importers, a significant part of the rise in demand for the greenback came from foreign equity and bond investors who are under a mandate to restructure their portfolios, not just in Vietnam but globally,' an analyst at a bank in Hanoi said.
Stock traders said on Monday foreign investors had been net sellers in the past 14 sessions to repatriate funds. The country's stock market has fallen more than 60 percent so far this year after a gain of 23 percent in 2007.
The State Bank of Vietnam said in a weekly market report seen on Monday that its base-rate cut of one percentage point to 13 percent early last week also contributed to the weakened dong.
The bank cut its base rate from Oct. 21 as part of efforts to ensure economic growth and limit the impact of the financial crisis.
'The central bank is closely monitoring developments in the market in order to take timely measures to stabilise foreign currency demand and supply if needed,' it said in the report.
Vietcombank, Vietnam's top bank to handle trade payments, said dollar sales more than doubled to $162 million on Oct. 22 from $60 million on Oct. 20, compared with average daily sales of around $50 million in the first nine months of 2008.
State-run BIDV, Vietnam's second-largest bank, said dollar sales also more than doubled to $50 million on Oct. 23 from $20 million the previous day, the report said.
On the interbank market the dollar was trading at 16,840 dong to 16,850 dong at 0300 GMT on Monday, at the top of the trading band of 2 percent against the central bank's mid rate.
The interbank's dollar rate was about 1.5 percent higher than a month ago, Reuters data showed.
(Reporting by Nguyen Nhat Lam; Editing by Jan Dahinten)
I read it when i can. Thanks for all you posts in the past. Just sad I bought it.(right now)
MY LAST POST ON THIS BOARD-SINCE NO ONE reads it any more.---------------------------------------------------------------
Vietnam Keeps Key Rate at 14%, Resisting Calls to Cut (Update3)
By Nguyen Kieu Giang and Nguyen Dieu Tu Uyen
Aug. 29 (Bloomberg) -- Vietnam's central bank kept interest rates unchanged to slow inflation from 28.3 percent, resisting calls to cut lending costs from the highest in Asia.
The State Bank of Vietnam will maintain the key rate at 14 percent for the next month ``to pursue its tight monetary policy in order to help curb inflation, and support production,'' according to a statement on the bank's Web site today.
``Keeping interest rates at this level shows that the government is ready to sacrifice economic growth and prioritize fighting inflation,'' said Huynh Thi Thanh Van, head of the capital markets division at Sacombank Securities Co. in Ho Chi Minh City.
Policy makers have been under pressure from companies to reduce borrowing costs, after three increases this year. Signs of moderating food and energy prices suggest the Southeast Asian nation's inflation, the fastest in Asia, may peak next month, according to JPMorgan Chase & Co. and HSBC Holdings Plc.
The government has cut this year's economic growth target to 7 percent from 9 percent as it fights inflation. Expansion was 8.5 percent last year, the fastest in more than a decade.
Representatives of Vietnam's associations for furniture, coffee and cacao, cashew nuts, fisheries, and footwear said in July that their members have serious shortages of cash to buy materials needed to keep production running.
`More Time'
Vietnam raised the benchmark rate from 12 percent on June 11. It also increased the refinancing rate to 15 percent, and the discount rate to 13 percent.
``We've seen some signs that inflation is slowing down, but it hasn't been that long since they last raised the base rate,'' said Kevin Snowball, Ho Chi Minh City-based chief executive of PXP Vietnam Asset Management Ltd. ``They need to give that more time to have an impact.''
Malaysia's central bank on Aug. 25 kept its benchmark interest rate unchanged to avoid worsening an economic slowdown. Thailand, Indonesia, India and the Philippines have all increased interest rates this year.
In a separate statement, the State Bank of Vietnam also said it will raise the interest rate it pays to banks on compulsory reserves to 3.6 percent from 1.2 percent.
The central bank lifted the reserve requirement to 11 percent from 10 percent on Jan. 16 and doesn't plan to lower it for the time being, Governor Nguyen Van Giau said yesterday.
Fund Shortage
Higher interest on these reserves will ``enable lenders to lower lending rates to help companies and borrowers boost production and business,'' today's statement said.
``This is really good news for banks as it helps us to reduce our lending interest rates and so it will be easier for us make loans,'' said Le Dao Nguyen, deputy chief executive officer in Hanoi at Bank for Investment & Development of Vietnam.
BIDV, the country's second-biggest lender by assets, today said it will reduce lending rates by as much as 0.8 percentage point to as low as 18 percent, according to an e-mailed statement from the bank.
Vietnam's four biggest lenders last month all cut lending rates from as high as 21 percent in response to pressure to ease a fund shortage.
Year-on-year inflation accelerated from 27 percent in July, and hasn't slowed since January 2007.
Inflation may peak in September at about 29 percent and lose pace in coming months as the economy slows, according to JPMorgan. Gains in consumer prices will probably slow after reaching a high of 28.4 percent next month, HSBC says.
A reduction of gasoline prices this week also spurred speculation that inflation may be close to peaking. Vietnam on Aug. 27 allowed retailers to lower gasoline prices for a second time this month, reducing costs by more than 5 percent because of falling oil prices.
To contact the reporters on this story: Nguyen Kieu Giang in Hanoi at giang1@bloomberg.net; Nguyen Dieu Tu Uyen in Hanoi at uyen1@bloomberg.net.
Last Updated: August 29, 2008 05:51 EDT
State Bank of Viet Nam helps stabilise economy
(12-08-2008)
During yesterday’s online interview on the Government’s website, central bank Governor Nguyen Van Giau re-affirmed the capability of the State Bank of Viet Nam (SBV) to effectively stabilise the foreign exchange (FX) market whenever the market showed an unbalanced supply-demand ratio due to sentiment and speculation.
What is the central bank’s master plan to balance the target of controlling inflation and the target of ensuring sufficient capital for enterprises?
Governor of the State Bank of Viet Nam Nguyen Van Giau. — VNA/VNS Photo The Anh
Facing the global economic bailout and the complicated changes in the domestic economy since early this year, the Government is determined to achieve three major targets: control inflation, stabilise the macro-economy, and ensure social security and stable development. Of these, controlling inflation is the first priority.
The SBV has simultaneously implemented five measures to manage the monetary market and banking system.
First, the SBV has withdrawn money from circulation, increased compulsory reserves in commercial banks, issued compulsory treasury notes, and controlled the growth of total payment methods and credit. All these measures are aimed at curbing total demand and consumer prices.
Second, the central bank has renewed the interest-rate management mechanism, and increased the prime interest rate, the refinancing rate and the discount rate. This was to create a reasonable interest rate corridor for outstanding loan growth, and to pursue positive interest rates [deposit rates higher than inflation rates].
Third, the central bank has managed a flexible exchange rate policy. The SBV has widened the daily trading band on inter-bank market to +/-2 per cent from +/-1 per cent against the interbank rate. The central bank also co-operated with authorities to check and stop speculation and illegal trading on foreign currencies in order to stabilise the FX market.
Fourth, the central bank raised support for commercial banks via open market operations and other refinancing methods. Capital was prioritised for manufacturing, export, major national economic projects, agriculture and rural development.
Fifth, the SBV has improved monitoring of the monetary market and credit institutions, and created a modern information system. So far, credit institutions are safe with capital adequacy ratio (CAR) higher than the regulated level.
The Prime Minister has emphasised that the central bank is the major tool for curbing inflation. So is it necessary to improve the central bank’s role?
As a state administrator on money and the banking system, the central bank plays an important role in stabilising currency values, controlling inflation, and boosting socio-economic development under a socialist orientation.
In Decision No 112/2006/QD-TTg, the Government ratified the master plan for developing Viet Nam’s Banking system towards 2010 and 2020. The project is designed to develop the central bank into a modern one in accordance with the standards of other regional central banks.
In the near future, the SBV will continue to perfect the legal framework of the banking business.
As a rule, demand on goods imports risen sharply in the latter part of the year, which results in high demand for foreign currency. How does the SBV plan to stabilise the exchange rate at the end of this year?
The ongoing measures of the Government to control the trade deficit lead us to estimate that by the end of this year, it will be less than US$20 billion. At this level, foreign reserves from many sources are sufficient to compensate for the trade deficit.
Moreover, remittance by the end of the year is expected to increase. Foreign direct investment disbursement and revenue from exports are also expected to move up. Thus, supply of foreign currencies is predicted to be in surplus and the USD/VND exchange rate is expected to be stable.
In case the market shows an unbalanced supply-demand due to sentiment or speculation, the central bank will be able to quickly return it to the right track.
In the coming months, the SBV will continue to flexibly manage the exchange rate policy based on market realities so as to encourage exports and limit imports.
Many experts assume that granting licences to set up new banks is rather ‘open’, particularly for a small economy like Viet Nam. What is the opinion of the SBV in this issue?
Implementing the government’s order, the central bank had stopped granting licences to new banks in 1996 to strengthen the existing banking system. However, pursuant of World Trade Organisation commitments, after 2006, Viet Nam was not be able to refuse licences to new banks.
Under international regulations, the SBV issued Decision No 24/2007/QD-NHNN on June 7, 2007 regulating the setting up of new banks. In the first seven months of this year, the SBV granted operating licences to a mere two banks -- LienViet Bank and TienPhong Bank.
Facing monetary difficulties in local and global markets, the Government has ordered the central bank to adjust the criteria for setting up joint stock commercial banks. As this is still ongoing, the central bank has paused granting licences to new banks.
The criteria will be changed with a view to ensuring that any new bank must have a strong financial capacity and be able to compete in this era of international economic integration. — VNS
ietnam sells 129 bln dong govt bond at auction
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Learn to Trade with a FREE Guide.HANOI, Aug 1 (Reuters) - The Vietnam Development Bank has raised 129 billion dong ($7.82 million) by selling government bonds at an auction, the Hanoi stock exchange .HASTCI said.
The 15-year bond was sold at an annual yield of 15 percent to three unidentified bidders at an auction on Thursday after they bid for yields of between 14.5 percent and 20 percent, the exchange said in a statement issued late on Thursday.
The state-run bank also offered five-year and 10-year bonds worth 400 billion dong but bids for the five-year debt of 21-22 percent and 20.5 percent for the 10-year debt were all above the 15 percent ceiling the bank was prepared to accept, the statement said.
The Vietnam Development Bank and the Vietnam Bank for Social Policies are Vietnam's two lenders that provide soft loans to support the government's development projects such as infrastructure construction, agricultural production and exports.
The development bank issues bonds on behalf of the government to raise funds for these projects.
In the auction on July 16, the Vietnam Development Bank sold 15-year bond worth 7 billion dong also with yield of 15 percent. ($1=16,496 dong) (Reporting by Ho Binh Minh; Editing by Clarence Fernandez)
© Thomson Reuters 2008 All rights reserved
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Monday, July 21, 2008
Vietnam Dong Gains Most in Nine Years as Banks Sell Dollars
Vietnam's dong climbed the most in nine years against the dollar after lenders and exporters sold the U.S. currency to meet local funding needs. Government bonds gained.
The currency was at 16,640 per dollar as of 4:10 p.m. in Hanoi, from 16,795 on July 18, according to data compiled by Bloomberg. Today's 0.92% advance marked its best one-day performance since April 1999.
Dong liquidity is very tight and interest rates are high, and with most banks short of dong, they tend to need to sell dollars to get dong,'' said Nguyen Hoang Son, a foreign-exchange trader at Citigroup Inc. in Ho Chi Minh City. Exporters also cut bets that Vietnam's currency would resume a losing streak that drove it to a record low earlier this month, he added.
The currency has rebounded 1.2 percent since reaching 16,850 per dollar on July 9, the weakest level since at least 1993. Speculation inflation will slow from a 16-year high also helped provide some support for the dong today.
Vietnam's consumer price index will rise by about 1 percent this month from June, Nguoi Lao Dong newspaper reported, citing Le Xuan Nghia, general director of the central bank's banking development strategy department. That's less than last month's 2.1% increase and may help bring the nation's inflation rate down from June's 26.8%, which was the highest since at least 1992 and more than triple the level of a year earlier.
Vietnam's economy also shows signs of strengthening in the second half and the exchange rate has become more stable, Nghia was reported as saying. The currency slumped to 16,850 per dollar on July 9, the weakest since at least 1993.
Fuel Increases
In the market we heard inflation this month would be about 1.2 percent,'' said Duong Minh Duc, a fixed-income trader at the Ho Chi Minh City-based Saigon Securities Inc.
Brokerages including Citigroup said the dong retraced much of its gain in the afternoon after fuel price increases announced today by the government fanned speculation inflation will gather pace. Such a rebound was not recorded in data compiled by Bloomberg.
The government raised the price of gasoline by 31% and that of kerosene by 44% to reflect higher crude oil costs, prompting HSBC Holdings Plc to predict that inflation would exceed 30% next month.
The State Bank of Viet Nam said on its Web site it has sufficient foreign currency to meet domestic demand and urged people not to rush to buy dollars. The central bank fixed a daily reference rate of 16,500 a dollar, compared with 16,501 on July 18, its Web site said. The currency is allowed to trade up to 2% on either side of the rate.
Further Weakness
Non-deliverable forward contracts indicate traders are betting the dong will drop 12% against the dollar to 18,990 in the next 12 months.
Forwards are agreements to buy and sell assets at current prices for delivery at a specified time and date. Non- deliverable contracts are used for currencies that can't be freely converted and are settled in dollars.
The Southeast Asian nation's benchmark bonds gained for a fourth straight day today. The yield on the five-year notes fell 40 basis points to 18.83% as of 4:30 p.m. in Hanoi, from 19.23% on July 18, according to a daily fixing price from 10 banks compiled by Bloomberg. A basis point equals 0.01 percentage point and yields move inversely to prices.
http://www.vnbusinessnews.com/2008/07/vietnam-dong-gains-most-in-nine-years.html
What do you make of this, if 1 Million=$10.oo=
Currency Converter
Currency Conversion Results
Symbol U.S. Dollar Exchange
Rate Vietnam Dong Bid Ask
USDVND=X 1 Jul 4 16,847 16,847 16,847 16,852
when dealers are charging at least $60. PER million Dong .
Glad to meet you, I would like to hear your View on the Currency, If you care to tell us. Do you think they will or won't Revalu the Dong. do you have any connections back in VN.
Rick.
Hello rick...i am vietnamese here!
Conference looks at WTO’s impacts
(04-07-2008)
HA NOI — A conference on the problems faced by Viet Nam one year after joining the World Trade Organisation opened in Ha Noi yesterday, co-organised by the Ministry of Trade and Industry, the World Bank and Viet Nam’s post-WTO Co-operation Technical Programme.
Intellectual property protection, Viet Nam’s implementation of WTO obligations, improvements in the legal system and the impact of agricultural and environmental agreements on the legislation of Viet Nam were among 11 issues discussed at the conference.
The issue of intellectual property was mentioned as one of the most urgent problems of the post-WTO period.
According to experts, Viet Nam’s weak enforcement mechanisms for the protection of intellectual property rights (IPR) has hindered the development of high-tech industries, an area in which Vietnam has huge potential. Meanwhile, the entertainment industry continues to be troubled by illegal piracy.
According to Thomas Theutler, a lawyer invited to the conference by the World Bank, Viet Nam should apply stronger fines for violations of IPR and establish a specialised intellectual property court.
Experts at the conference also suggested that courts should make their decisions independently without the aid of administrative agencies.
The conference went on to cover the impacts of WTO membership on agriculture as well as the influence of the WTO’s Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) on the legislation of Viet Nam.
Viet Nam currently faces problems in supporting farmers and foodstuffs processors, in particular with poor infrastructure compared to that of its main competitors in agricultural trade. Difficulties also remain in the monitoring, surveillance and reporting of plant and animal health and food safety hazards.
Regarding Viet Nam’s implementation of WTO obligations and improvements in the legal system, David Gantz from the University of Arizona suggested raising judicial salaries, improvement of legal and judicial training and the creation of a specialised court or courts with exclusive jurisdiction over international trade cases, intellectual property cases and commercial cases. He also proposed establishing a truly independent anti-corruption commission, increasing transparency, and the publication and disclosure of proceedings throughout the central and provincial governments. —VNS
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Thomson ReutersVietnam's economic indicators - July 1
--------------------------------------------------
Tue Jul 1, 2008 10:29am IST
Vietnam's economic indicators VNECI01
VNECI02. * Updated today CURRENCY/INTEREST RATES July 1 Dec. 28, 2007 July 2, 2007
*Dlr/dong (c.bank rate) 16,517 16,111 16,132
*The VN Index .VNI 409.61 927.02 994.17 *Latest (June 11) Previous (May 19, 2008)
Base rate 14.0 12.0
(for deposits, lending)
Discount rate 13.0 11.0
Re-financing rate 15.0 13.0 GDP, pct, y/y 2007 2006 2005 2004 2003 2002 2001 2000 8.48 8.17 8.44 7.79 7.34 7.08 6.89 6.79 ____2008____ ________2007________ ________2006________ *H1 Q1 Q3 Q2 Q1 Q3 Q2 Q1 6.50 7.43 8.69 7.98 7.73 8.67 7.54 7.18 CONSUMER PRICE INDEX, pct 2007 2006 2005 2004 2003 2002 2001 2000 12.6 6.6 8.4 9.5 3.0 4.0 0.8 -0.6 __________2008___________ ____________2007_______________ *June May Apr Mar Feb Dec Nov Oct Sept Aug July June
y/y 26.8 25.2 21.4 19.4 15.7 12.6 10.0 9.3 8.8 8.6 8.4 7.8
m/m 2.1 3.9 2.2 3.0 3.6 2.9 1.2 0.7 0.5 0.6 0.9 0.9 RETAILS SALES, pct, y/y 2007 2006 2005 2004 2003 2002 2001 2000 23.3 20.9 20.5 19.4 18.8 14.5 11.3 9.7 ________2008________ ________________2007________________*Jan-June Q1 Jan-Sept Jan-June Q1 30.0 29.2 22.8 22.9 22.3 TRADE ACCOUNT, in billions of dollar 2007 2006 2005 2004 2003 2002 2001 2000-12.4 -5.06 -4.31 -5.48 -5.12 -3.04 -1.19 -1.15 ___________2008______________ __________2007______________ *June *May Apr Mar Feb Dec Nov Oct Sept June
EXP 5.50 5.95 5.09 4.70 3.42 4.70 4.55 4.28 3.73 4.14
IMP 6.80 7.85 8.31 7.00 6.19 6.30 6.17 5.63 4.96 5.41
BAL-1.30 -1.90 -3.22 -2.30 -2.77 -1.60 -1.62 -1.35 -1.03 -1.27
(Figures for the latest month are estimates) INDUSTRIAL GROWTH, pct, y/y 2007 2006 2005 2004 2003 2002 2001
Overall 17.1 17.0 17.2 16.0 16.0 14.5 14.2 ___________2008_________ ___________2007__________ *June May Apr Mar Feb Dec Nov Oct Sept June
Overall 17.1 16.7 16.8 16.4 16.1 20.7 17.4 16.7 18.1 19.5
State 6.6 4.6 13.0 5.5 12.5 12.9 10.6 11.4 11.5 15.3
Non-state 22.7 20.6 18.6 23.2 17.8 24.3 21.0 19.0 23.6 20.9
F.invested 18.8 20.8 17.3 17.2 16.6 21.3 18.0 17.7 17.1 21.1
SOURCES: General Statistics Office, ministries, the central bank FORECASTS/TARGETS
GDP, pct 2008 2007
-- Government/GSO 7.0 8.48
-- ADB 7.0 8.5
-- IMF 7.3 8.3
-- World Bank 8.0 8.5
(The Communist Party targets annual GDP growth at 7.5-8 percent
for 2006-2010, from the average 7.51 percent in 2001-2005)
CPI, pct 2008 2007
-- Government/GSO *n/a 12.6
-- ADB 18.3 8.3
-- IMF 7.7 7.3
-- World Bank 12.6 12.6
-- MPI *22.0
(Data from GSO, ADB and IMF are the average rates;
MPI: the Planning and Investment Ministry)
MONEY AND CREDIT, pct
Broad money (IMF) 33.6
Credit growth 50.0 (IMF)
-- Central bank/MPI 30.0 *53.8
-- ADB 54.0
-- World Bank 30.0 53.9
*Outstanding loans (bln dong) May 08 Apr 08 end-2007 end-2006
-- Central bank 1,278.6 1,250.5 1,080.0 702.2
Non-performing loans, pct 2007 2006
-- Central bank ~2.0 2.65
NOTE: ~ based on Vietnamese accounting standards; The rate was
5 percent if international accounting standards were used,
according to a foreign expert.
EXPORT GROWTH, pct
-- Government/GSO 20-25 21.5
-- ADB 18.7 21.5
-- World Bank 22.0 21.9
-- MPI *37.0
IMPORT GROWTH, pct
-- Government/GSO 20-25 35.5
-- World Bank 20.0 39.6
TRADE DEFICIT, in billions of dollar
-- Government 16.97 12.4
-- World Bank 15.97 14.1
-- MPI *30.0
INDUSTRIAL GROWTH, pct
-- Government 17.5 17.1
-- ADB 10.6 18.0
-- World Bank 16.8 17.1 2008 2007 2006 2005
CURRENT ACCOUNT BALANCE/GDP, pct
-- ADB -10.3 -8.0 -0.5 -1.0
-- World Bank -9.0 -9.7 -0.4 -1.1
-- IMF -13.6 -9.6
FOREIGN CURRENCY RESERVES in weeks of import
-- Central bank 20.0 12.0 10-12
-- World Bank 15.0 15.2 10.4 9.4
FOREIGN CURRENCY RESERVES, in billions of dollar
-- Government/C.bank *20.7 (June) 20.0 12.0
-- ADB (-gold) 19.93 11.42 8.6
-- IMF (+gold) 23.66 19.93 11.5 8.6
-- World Bank 22.1 21.6 11.5 8.6
(ADB estimate for 2007 is as of September)
FOREIGN DEBT, in billions of dollar
-- Fin. Ministry 20.0
-- ADB 21.3 19.5 17.4
-- World Bank 24.8 22.4 19.2 17.5
FOREIGN DEBT/GDP, pct
-- Government/Fin. Min *29.0 37.3 35.8
-- ADB 32.6 32.5
-- World Bank 30.5 31.6 31.5 32.9
FOREIGN DIRECT INVESTMENT, in billions of dollar
~2008 2007 2006 2005 2004 2003 2002 2001 2000
10.00 8.03 3.96 3.31 2.85 2.65 2.59 2.45 2.41
~: government target
MPI/GSO *June 08 *H1 2008 H1 2007
New projects 16.22 30.95 n/a
Increased capital n/a 0.66 1.20
Actual inflow n/a 5.00 3.63
OVERALL 2008 2007 2006 2005
MPI (2008: target) *35 20.3 10.2 5.89
World Bank (inflow) 5.5 2.8 2.4 2.00
FOREIGN PORTFOLIO INVESTMENT, in billions of dollar June 08 Dec 07 Sept 07 June 07 Mar 07 *8.0 7.6 6.2 5.0 4.0
POPULATION 2007 2006 2005 2004 2003 2002 2001 2000
Mlns 85.20 84.16 83.11 82.03 80.90 79.73 78.69 77.64
URBAN UNEMPLOYMENT, pct 4.64 4.82 5.31 5.60 5.78 6.01 6.28 6.42
LONG-TERM CURRENCY RATINGS Rating Outlook
Moody's (June 4, 08) Ba3 (foreign, local bonds) *Negative B1 (foreign cur. deposit ceiling)*Negative
Fitch (May 29, 08) BB- (foreign) BB (local) *Negative
S&P (May 2, 08) BB/B (foreign) BB+/B (local) Negative To access the following, click on the codes in brackets.
COUNTRY OVERVIEW EQUITY FIXED INCOME MONEY FX NEWS
Vietnam...VIETNAM...<VN/EQUITY>..<VN/DEBT>......<VND/1>...[VN]
© Thomson Reuters 2008 All rights reserved
Viet Nam takes UNSC chair
(01-07-2008)
HA NOI — Viet Nam will officially begin its month-long chair of the United Nations Security Council (UNSC) from today, affirming the country’s increasing political role in settling issues of conflict that are important to international security, said the Ministry of Foreign Affairs.
Ambassador Le Luong Minh, Viet nam’s permanent representative to the UN Security Council, said the country would contribute to the council’s decisions and reflect concern on the legitimate interests of member countries and relevant agencies.
"Viet Nam is committed to contributing to the settlement of conflicts through dialogue and peaceful negotiation and respects the independence, sovereignty and territorial integrity of all countries," he said.
The ambassador said Viet Nam was prepared for its role as UNSC’s Chair. Representatives from member countries affirmed that Viet Nam would be able to make great strides in this role particularly in promoting peace and conflict resolutions.
So far this year, Libya, Panama, Russia, South Africa, the UK and the US have chaired the UNSC. Viet Nam became a UN Security Council non-permanent member on January 1 this year for the 2008-09 term.
Deputy Director of the ministry’s Press and Information Department Nguyen Phuong Nga reported that Deputy Prime Minister and Minister of Foreign Affairs Pham Gia Khiem would lead a Vietnamese delegation to take part in important activities of the UNSC and chair a high-ranking open discussion in accordance to the monthly agenda. Viet Nam would build on UNSC working programmes and agendas. It would judiciously study the different proposals put forward by various countries’ and decide which ones to entertain during the sessions.
However, the country’s role will mainly centre on procedures needed to help countries reach a joint agreement.
Viet Nam will host and manage around 40 closed and public conferences this month. To prepare for these conferences, it will carry out un-official meetings with UNSC member countries and countries related to the issue at hand as well as with organisations and individuals negotiating on matters related to UNSC drafts, declarations and resolutions.
In its capacity as the Chair the country will work with media outlets and report the outcome of UNSC’s conferences to UN member countries.
As the main representative of the UNSC, Viet Nam will also hold regular meetings with the UN Secretary General and other senior leaders of the UN’s Secretariat, the President of the UN’s General Assembly, the President of the UN’s Economic and Social Council, and those countries whose pressing issues need attention.
As Viet Nam takes the role in July, the country will gear up to prepare the UNSC’s yearly report (from July 31, 2007 to July 31, 2008) to send o the UN’s National Assembly and review the council’s activities. — VNS
READ PARAGRAPH LOCATED BETWEEN THE LINES.--------RICK
(27-06-2008)
Is Viet Nam in dire financial straits?
by Dr Phan Van Thanh
Having emerged from the last 15 years as a success story in terms of development, Viet Nam now finds itself in economic troubled waters caused by a deterioration in macro-economic fundamentals: inflation of 25 per cent year-on-year in May, a widening trade deficit, a liquidity crunch in the banking sector, falling bond prices, a jittery stock market and a looming real estate crisis?
Do all these factors point towards an economic recession on a par with that experienced by Thailand 10 years ago?
To answer this question we need to look at a number of factors such as the country’s development status, the regulatory and supervisory framework, as well as other local and global factors.
The Thai crises started with the bursting of the real estate bubble. That was followed by a 50 per cent depreciation in the baht and the fleeing of foreign direct and portfolio investors who were playing a significant role in the local stock exchange. The whole process was accelerated by the ease with which it was possible to carry out current account and capital account transactions and the baht’s convertibility.
Compared to Viet Nam, the Thai stock exchange was at an advanced stage of development.
Viet Nam’s current negative development is a home-made phenomenon that has been amplified by the international commodity price shocks – which themselves have been mitigated by the fact that Viet Nam is a net oil and rice exporter.
Despite full WTO-membership, the country is not fully integrated into the world economy. The money flowing into Viet Nam so far has been in the form of FDI (foreign direct investment), ODA (official development assistance) and other long-term investments, against a limited short-tern fund entry. At the end of 2007, the country’s external debt was worth 29 per cent of its GDP – at the end of 1996 Thailand external debt stood at 59 per cent of its GDP.
The Viet Nam dong is not yet convertible and the foreign exchange market is controlled. The stock exchanges are still small and in an early stage of development. From the end of 2007 to now, total market capitalisation has dropped by 60 per cent. A large part of the stock portfolio involves property and securities held by non-residents, which have lost a large part of their value. However, that figure is far less that the cumulative inflow of US$9 billion since 2006.
The widening trade deficit, around $14.4 billion in the first months of this year, is threatening the country’s balance of payments and putting significant pressure on the dong. However, national reserves, excluding gold, are worth $20.7 billion – worth more than three months of imports – plus net FDI and FII, which have helped to buffer the risks.
=========================================================
On the policy and regulatory fronts, the Government has declared that it will keep the exchange rates running flexibly, curb speculation on the grey market and not devalue the dong.
===============================================================
Current account transactions were liberalised some time ago but capital account transactions are still subject to controls, which will keep outflows at a manageable level and ease pressure on the exchange rate.
Facing the toughest challenge yet, the Government has worked out a package of measures designed to restore macro-economic stability, which has come at the cost of some growth (down 9 per cent to 7 per cent in 2008). As well as monetary and fiscal policies, the package includes strict administrative and punitive measures to curb market speculation.
The fight against inflation began with the central bank hiking prime rates, raising reserve requirements, issuing compulsory bonds and ceiling credit growth of 30 per cent in 2008, together with flexible foreign exchange rates that are supported by the price controls on some strategic goods. This has demonstrated to some extent the central bank’s policy-making and regulatory ability.
In supporting (rather than burdening) monetary policy, the fiscal measures are designed to cut government spending, which includes spending on inefficient State-owned enterprises.
The Government’s recent moves to consult international organisations on how to deal with its economic problems have been welcomed by the media, the business world and investors, who still demonstrate confidence in Viet Nam’s medium – and long-term outlook – as evidenced by record high registered FDI of $ 31.6 billion in the first half of 2008, compared to $21.3 billion in 2007.
Positive signs that the Government’s actions were working were shown in market movements in June. Credits in the first half 2008 slowed to 20 per cent compared to 54 per cent in 2007; domestic consumption is slowing; imports show signs of dropping; the consumer price index in major cities is slowing down and property prices have fallen by 20 per cent to 60 per cent.
While helping to deflate the looming real estate bubble, monetary tightening has resulted in a liquidity crunch that is also hitting sound enterprises and projects – including much needed infrastructure ones that are essential for sustainable economic growth. This in turn creates funding problems and fuels borrowing costs, leading to a slowing down in the economy.
Overall, I do not see an imminent crisis but I do see Viet Nam facing major challenges ahead.
The Government’s fiscal policy must be decisive and consistent in order to support the effectiveness and efficiency of its monetary measures. —VNS
UPDATE 3-Vietnam suspends gold imports as trade gap widens
Mon Jun 23, 2008 1:37pm IST
By Lewa Pardomuan
SINGAPORE, June 23 (Reuters) - Vietnam has temporarily suspended gold imports as Hanoi struggles with a trade deficit that has tripled this year, but the move is unlikely to lift local prices because of plentiful supplies and weak demand.
The move, in place for the past two weeks, is an effort by Asia's second-largest gold investor to ease the economic burden as Hanoi steps up efforts to rein in inflation by tightening credit, said Hyunh Trung Khanh, a consultant for the Vietnam chapter of the World Gold Council.
"The government is very concerned. They have to reduce the trade balance deficit. Gold is one of the main imports," he said.
But traders added only a prolonged suspension could cut domestic supplies and trigger a scramble for safe-haven assets. Fears that the dong could fall in value are making dollar holders reluctant to let go of their foreign exchange.
"Of course this depends on how long the suspension lasts," said Adrian Koh, an analyst at Philip Futures in Singapore.
Traditionally, Vietnamese use gold for savings, jewellery and real estate transactions but when inflation is high many choose gold or the U.S. dollar to hedge against inflation.
Khanh said Vietnam had imported 60 tonnes of gold valued at $1.8 billion in the January-May period, up 100 percent from the same year-ago period.
The central bank have given quotas to 40 banks and trading houses to import 73 tonnes of gold in 2008, up slightly from about 70 tonnes in 2007.
"They have required companies and banks which have not imported yet to remit back their remaining quotas to the central bank. Eleven tonnes have not been imported yet," said Khanh.
Vietnam imported 77.7 tonnes of gold -- both for jewellery and for investment in 2007 -- well below purchases by main consumer India, which imported more than 700 tonnes last year.
For a graphic on Vietnam's gold investment demand, click on: here
OVERHEATING
Following a year of overheating and high credit growth, 2008 has been strained for Vietnam, where macroeconomic stability was taken for granted as it boasted one of the world's highest growth rates, averaging 7.5 percent a year since 2000.
Speculation that the dong would fall has weighed on the currency.
Gold powered to a record of $1,030.80 an ounce on March 17on record-high crude oil, which raised fears of inflation and expectations of more rate cuts in the United States, making the metal more attractive as an alternative investment.
Gold <XAU=> has since corrected and stood around $905.85 on Monday, and barely reacted to the news on Vietnam.
"We have imported quite a lot. So there's still quite a lot of gold inside the country, and the demand in June is slowing down. The difference between the local and international gold price is not very high," he said without elaborating.
The price of gold was quoted by local dealers at around $873 an ounce, lower than international prices.
"Re-export of gold is not restricted but we have not seen any selling on the international market so far because they can still make a good, handsome profit in the local market," said an official at the Vietnam Gold Traders Association. (Additional reporting by Nguyen Nhat Lam in HANOI; Editing by Sambit Mohanty)
© Thomson Reuters 2008 All rights reserved
AP Texas News
June 23, 2008, 6:49AM
Vietnam's PM visits US
By MARGIE MASON Associated Press Writer
© 2008 The Associated Press
HANOI, Vietnam — Vietnam's prime minister began a visit to the United States on Monday, hoping to gain some economic tips that might help ease soaring inflation at home.
Prime Minister Nguyen Tan Dung is the communist country's third high-ranking leader to visit Washington since the former foes normalized relations in 1995, two decades after the Vietnam War ended. The countries have since built strong economic ties, with the U.S. becoming a leading trade and investment partner.
Vietnam's inflation, which hit 25 percent in May over the same period last year, is among the region's highest. The country began opening up to a market economy in the mid-1980s, and Dung said it still has a lot to learn.
"The Vietnamese government attaches importance to the experiences of other countries, including the U.S., and is willing to exchange views with other countries, experts on experiences in economic development, management of macro economy and in curbing inflation," Dung told The Associated Press in a written response to submitted questions.
Dung was expected to meet President Bush, Treasury Secretary Henry Paulson and former Federal Reserve Chairman Alan Greenspan during his trip. He also planned to open a new Vietnamese consulate in Houston, home to thousands of Vietnamese-Americans.
Dung was not expected to make stops on the West Coast, where the largest population of overseas Vietnamese, known as Viet kieu, live. Many remain fiercely anti-communist after fleeing to the U.S. as refugees when the U.S.-backed South Vietnamese government fell to northern communist forces in 1975.
Former Prime Minister Phan Van Khai was met with protests during a 2005 stop in Seattle — the first time a Vietnamese leader paid an official visit to the U.S. since the war.
President Nguyen Minh Triet traveled to Washington last year, and a number of high-level U.S. leaders have also stopped in Hanoi, including Bush's visit in 2006 when he attended the Asia-Pacific Economic Cooperation forum.
U.S. Ambassador Michael Michalak said last week that Dung and U.S. officials would discuss topics ranging from trade and investment to climate change, nuclear energy and education. Human rights also will be on the agenda, following a number of arrests involving U.S. citizens who were peacefully promoting democracy.
Dung maintains that "there are no political prisoners in Vietnam." He has also defended the recent arrest of two Vietnamese journalists who had aggressively reported on a high-profile corruption scandal. They were accused of abusing power for allegedly publishing inaccurate information about the case, which involved several government officials. Several newspapers have called for the journalists' release — a bold move in a country where all media are state-controlled.
"The two journalists were not probed and detained because they fought against corruption," Dung said. "Vietnam is a law-governing state, all citizens are equal before the law and protected by laws and will be severely punished if they violate the laws regardless of who they are."
Michalak said he expected many business deals to be signed during the visit. Executives from about 60 Vietnamese companies were traveling with the prime minister.
Two-way trade between the countries topped US$12 billion in 2007, an increase of 34 percent from 2006, according to government figures.
Vietnam H1 trade deficit triples to $16.9 bln-paper
Mon Jun 23, 2008 7:37am IST Email | Print | Share| Single Page[-] Text [+] HANOI, June 23 (Reuters) - Vietnam estimated its trade deficit would more than triple to $16.9 billion in the first half of this year as imports soared 64 percent, a state newspaper reported on Monday.
The government is expected later this week to release full data on trade and inflation, which reached 25.2 percent in May, as the imbalance and rising prices strain the developing economy and hurt domestic investor confidence.
The official Lao Dong (Labour) newspaper cited Planning and Investment Ministry statistics as recording January to June imports would surge to $45.5 billion while exports would rise 27 percent from the first six months of 2007 to $28.6 billion.
The trade deficit was $5.2 billion during the first half of last year while the full-year trade deficit was $12.4 billion, according to government data.
"This is causing imbalance to the payment account and is the factor triggering fluctuations in the foreign exchange rates recently," the Vietnam Labour Confederation-run newspaper said.
The daily exchange rate set by the State Bank of Vietnam, the central bank, values the Vietnamese dong <VND=> 9 percent higher against the dollar than the black market rate. On Monday, the central bank set the rate at 16,450 dong to the dollar, while the unofficial rate was about 18,000 dong to the dollar.
Vietnam has total foreign exchange reserves of $20.7 billion, State Bank of Vietnam Governor Nguyen Van Giau told international investors last week.
The Planning and Investment Ministry has forecast exports to rise 37 percent this year to $83 billion, above the government's initial projection of 20-25 percent, but that the trade gap would widen to $30 billion. (Reporting by Ho Binh Minh; Editing by Grant McCool)
Vietnam's Controls Will Avert Crisis, S&P's Chew Says (Update3)
By Patricia Lui and Jason Folkmanis
June 19 (Bloomberg) -- Vietnam's ``extensive'' capital controls and the management of its currency will prevent overseas investors from fleeing the nation even as inflation accelerates and economic growth slows, said Standard & Poor's.
Foreign funds are mostly limited to buying property and stocks, said Ping Chew, the Singapore-based head of Asian sovereign and corporate ratings at S&P, the first of three ratings firms to lower the Southeast Asian nation's credit outlook to negative. Stocks have slumped almost 60 percent this year, the world's worst performance, and the dong is set for its biggest drop since 2001, falling 3.6 percent.
``Vietnam is not in a currency crisis,'' Chew said in a June 17 interview. ``There's definitely a bit of hot money that went in. But is it going to leave en masse like that which decimated Asia in 1997? I don't think so.''
S&P cut the country's BB long-term foreign currency rating outlook to negative May 2, saying the country's overheating economy was a risk to stability. That is two levels below investment grade. Vietnam's inflation rate rose to 25 percent in May as food and energy prices climbed and the trade deficit tripled in the first five months of the year.
Foreign investors have cut their stock purchases in half this year to $334.2 million, according to data compiled by Bloomberg. Morgan Stanley last month said the dong was heading for a ``currency crisis,'' citing a widening current-account deficit. Calyon, Credit Agricole SA's investment banking unit, said this month there was a threat of a balance of payments crisis and Citigroup Inc. said a banking crisis is the primary problem facing Vietnam.
`Very Bad Story'
The dong closed at 16,616.50 per dollar in Hanoi from 16,619.00 yesterday. It is allowed to trade 1 percent either side of a reference set by the central bank each day. The State Bank of Vietnam weakened the dong by 2 percent on June 11 seeking to prevent currency speculation and raised rates to 14 percent from 12 percent to curb inflation.
Forward contracts are pricing in a 33 percent drop in the next year, after taking into account interest-rate differentials, according to offshore 12-month non-deliverable forwards at 24,800 per dollar. Forwards are agreements in which assets are bought and sold at current prices for future delivery.
``Vietnam is turning into a very bad story,'' said Thomas Harr, a senior currency strategist from Standard Chartered Plc in Singapore. ``The 2 percent devaluation a few weeks ago was not a good move. They should instead have been more aggressive on hiking rates to signal that they are committed to dealing with inflation.''
The dong won't stop falling until investors are convinced of the central bank's commitment to fight inflation, he said.
Cracking Down
The impact of flagging confidence will be limited as investors will ``have difficulty'' taking profits out of Vietnam, said Joseph Lau, an economist at Credit Suisse Group in Hong Kong.
``Generally banks aren't allowed to trade the currency for speculation, you need to have a reason for it,'' said Lau. ``It is difficult for a householder to purchase dollars legally, which is why when they do want to do it, they have to go through the black market.''
Vietnamese banks selling U.S. dollars at a higher rate than the official trading level will be fined and may have their trading licenses withdrawn, Vietnam News reported, citing an official at the central bank.
While a ``herd mentality'' has led to a loss of confidence in the dong among some Vietnamese, the country's banking system is stable, said Dam Bich Thuy, Australia & New Zealand Banking Group Ltd.'s chief executive for Vietnam. ANZ has a 10 percent stake in Saigon Thuong Tin Commercial Joint-Stock Bank and a 12 percent stake in Saigon Securities Inc.
Banking Confidence
``We see some people trying to get dollars, but then they still put their dollars back into the banks,'' Hanoi-based Thuy said. ``They don't take money out and put it under the mattress.''
Vietnam's economy ``is in reasonably good shape,'' buoyed by strong currency reserves, Alex Thursby, Asian-Pacific managing director for ANZ told reporters in Ho Chi Minh City. ``I don't think there's a crisis.''
Vietnam's foreign currency reserves are about $20 billion to $22 billion, Credit Suisse's Lau said. By comparison, the market capitalization of companies on Vietnam's benchmark stock market, the VN Index, is $9.08 billion, the second smallest in Asia after Sri Lanka, according to data compiled by Bloomberg.
``This is still a managed currency with extensive capital controls,'' said Chew at S&P, which issued a report today saying that Vietnam faces pressures but no crisis. ``For the negative outlook to turn around, we need to see more tightening measures, we need to see them addressing lending problems in banks.''
Balance Sheets
Bank's non-performing loans may increase as the economy slows and the central bank raises lending costs, said Chew. The economy expanded 7.4 percent in the first quarter from a year earlier. Last year, gross domestic product grew 8.5 percent, the fastest pace since 1996.
The balance sheets of banks in Vietnam may not reflect the state of the bad loans as the country has yet to adopt internationally accepted accounting standards, he said. Non- performing loans are debts which fall behind on interest payments or are unable to service principal repayments.
To contact the reporters on this story: Patricia Lui in Singapore at plui4@bloomberg.net; Jason Folkmanis in Ho Chi Minh City at folkmanis@bloomberg.net
Last Updated: June 19, 2008 08:34 EDT
Vietnam Doesn't Plan to Allow Currency to Depreciate (Update1)
By Soraya Permatasari and Shamim Adam
June 15 (Bloomberg) -- Vietnam doesn't plan to let the dong depreciate because it would affect the economy, Finance Minister Vu Van Ninh said, identifying a fight against inflation as the government's biggest priority.
Vietnam's inflation rate, running at the fastest since 1992, may ease to below 10 percent next year as the government takes steps to cool surging prices, Ninh told participants at the World Economic Forum on East Asia in Kuala Lumpur today. ``We do not intend to depreciate the dong because it will have a great impact on our economy,'' he said.
Vietnam's central bank has increased borrowing costs three times this year to 14 percent, the highest in Asia, as the Southeast Asian nation seeks to tame accelerating inflation by tightening credit and cutting the supply of money. It lowered the dong's reference rate by 2 percent to prevent currency speculation on June 11.
``Our economy has been impacted especially with high inflation,'' Ninh said today. The government's biggest priority is to contain consumer price gains and ``restore economic stability.''
Consumer prices surged 25 percent in May, and analysts have warned the economy is at risk of a hard landing. The central bank increased interest rates on June 11 to 14 percent from 12 percent. It sets a daily reference rate that allows the currency to fluctuate by 1 percent on either side.
Tighter monetary policy this year has affected the stock market, Ninh said.
Political Stability
The country is experiencing ``short-term'' difficulty due to ``shortcomings'' in the economy, Ninh said. The government will need time to control inflation, which won't be an easy task; Vietnam's inflation is both ``domestically rooted'' and imported, he added.
The government, which has maintained its fuel subsidies to provide a safety net and ensure ``political stability,'' won't raise fuel costs this month and will take into account global crude prices when deciding on any increase in July, Ninh said in comments translated from Vietnamese.
``We maintain petrol prices low, so step by step we'll adjust the price,'' he said.
Vietnam may have to adjust oil and gasoline prices should global crude costs keep rising, Deputy Minister of Industry and Trade Nguyen Cam Tu said earlier this month. The government caps gasoline prices to keep fuel affordable for the country's 85 million people.
Trade Deficit
The nation's trade deficit tripled in the first five months of the year to $14.42 billion from $4.25 billion in the same period a year earlier.
Standard & Poor's, Moody's Investors Service and Fitch Ratings have all lowered their outlook on Vietnam's credit rating to negative since the beginning of May.
Vietnam's bank lending surged 50 percent last year as banks extended credit to retail investors and brokers to buy securities, and demand for mortgages increased as the real estate market boomed.
The government sees ``much potential for growth'' and will continue to implement reforms including selling state-owned enterprises, Ninh said today.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.netSoraya Permatasari in Kuala Lumpur at soraya@bloomberg.netChan Tien Hin in Kuala Lumpur at thchan@bloomberg.net
Business Banter
(13-06-2008)
How rate hikes are stabilising the economy
By Ha Phuong
The State Bank of Viet Nam’s whopping two per centage point interest-rate hike and the weakening of the local currency by almost another two per cent are welcome steps to reduce inflation and to narrow the burgeoning trade deficit.
However, more requires to be done to reach national targets.
Given that some organisations predicted Viet Nam might need an IMF-style assistance prog-ramme, the Prime Minister has confirmed Viet Nam does not need help at this stage.
On Tuesday, the central bank lifted the prime rate from 12 to 14 per cent, the refinance rate from 13 to 15 per cent, and the discount rate from 11 to 13 per cent – the second time it has raised the benchmark in within four weeks.
At the same time, to control the overheated economy, it adjusted down the Vietnamese dong against the US dollar by 1.96 per cent to VND16,461 from the previous VND16,139.
The two decisions came two weeks after the release of a 25.2 per cent annualised inflation rate in May – the highest since 1992 – and a trade deficit of US$14.4 billion caused by surging imports.
Foreign investors at a business forum in Ha Noi earlier this month warned local commercial banks they were facing a severe liquidity situation and might have to merge to survive. A Goldman Sachs report on Tuesday stated that by adjusting the price of money, interest-rate hikes would be more efficient than administrative measures, such as credit controls and raising compulsory reserve requirements.
It added that this would create less distortion and have more long-lasting impact on slowing the economy.
The International Monetary Fund (IMF) last week also suggested Viet Nam tighten monetary and fiscal policy to fix its overheating economy.
IMF’s chief representative in Viet Nam, Benedict Bingham, said the central bank should raise interest rates to provide adequate returns to those savings – and to bring credit growth and inflation under control.
On the other hand, some economists now believe the central bank should increase interest rates even more.
Vo Tri Thanh, senior economist with the Central Institute for Economic Management said that a further one to two per cent rise in the prime rate would be acceptable "if the inflation shows no sign of braking."
Normal adjustment
The resetting of the inter-bank exchange rate at VND16,461 was a dramatic rise from VND16,139 the previous day – and some were concerned that this meant a real devaluation of the dong by the central bank.
However, late last week, Prime Minister Nguyen Tan Dung said Viet Nam would not devalue the dong.
Responding to the concerns, the SBV’s governor, Nguyen Van Giau, explained that the change was a normal adjustment to make the exchange rate closer to market forces.
"It’s not a currency devaluation at all. Any adjusting is aimed at gradually stabilising the market. When the market becomes more stable, we will stop our adjustments. I have thoroughly discussed the situation with the Prime Minister," said Giau.
In other words, when people look at the nominal and real exchange rates, they will realise the latest moves will benefit exporters.
So far this year, the exchange rate has remained stable at about VND16,000 to the US dollar. If it had not been for marker interventions by the central bank, the dong would have appreciated early this year when capital inflows were still considerable, said an economic update titled "Taking Stock" by the World Bank.
However, the report added that the Vietnamese currency depreciated slightly when portfolio inflows slowed down and the surging growth of imports used up a large amount of US.
The apparent stability of the nominal exchange rate hides a sizeable real appreciation of the dong in recent months.
"This was the result of the two opposite forces. By implicitly pegging the dong to the dollar, the monetary authorities allowed a depreciation of the dong because the dollar depreciated against the other major currencies Viet Nam uses to import or export goods," the World Bank report said.
It added that if Viet Nam had pegged the local currency to a basket of currencies, including the euro and the Japanese yen, with the weights reflecting the pattern of Viet Nam’s foreign trade, the price of the dollar to the dong would have fallen by roughly 5 per cent.
However, during this period, inflation in Viet Nam was much higher than that of its main trading partners. This gap amounted to a loss of competitiveness for the domestic economy.
The World Bank said that if the central bank tried to maintain competitiveness with Viet Nam’s main trading partners, the price of a dollar to the dong should have increased by about 12 per cent.
The report claimed that the appreciation of the dong was not a welcome development when the economy was facing a large trade deficit.
So, according to the Goldman Sachs report, it was "laudable that the Vietnamese monetary authority has reacted pre-emptively against the Vietnamese dong overvaluation in real terms and undertook a policy change before the currency crisis risks escalated to a less-manageable level."
Many now understand that the weakening of the dong is modest based on the calculations of the World Bank. In fact, the dong could have easily fallen to 18,075 to the dollar.
However, there are those who believe the depreciation is still not big enough to cut losses for Vietnamese exporters – and therefore encourages the importation of goods.
The IMF believes greater exchange-rate flexibility would simplify monetary management and help the central bank manage shifts in capital flows more effectively. — VNS
WE SHALL NEVER FORGET OUR LOST BROTHERS AND SISTERS. -RICK C
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http://www.bangkokpost.com/
Search begins at Vietnam site for remains of Army captain
Associated Press
June 11, 2008
HARTFORD, Conn. - The search is beginning for the remains of an Army captain from Waterford who was shot down over Vietnam in 1972.
A U.S. military team is excavating a ridge west of Vietnam's Hue City to find the remains of Arnold "Dusty" Holm. U.S. Rep. Joe Courtney, D-Conn., confirmed the start of the work.
Holm, who was a 28-year-old Army captain at the time, and two passengers are believed to have died in a downed helicopter on June 11, 1972.
The search team, coordinated by the Joint POW/MIA Accounting Command, is set to continue through July 25. It will use techniques similar to an archaeological dig.
Work two years ago found the site where Holm's scout helicopter was believed to have crashed.
---
Information from: The Hartford Courant, http://www.courant.com
Thursday June 12, 2008
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Vietnam a concern for Thai bankers
BBL, SCB and Exim monitoring exposure
SOMRUEDI BANCHONGDUANG & WICHIT CHANTANUSORNSIRI
Local bankers are watching nervously events to the east, where Vietnam appears to be on the verge of a full-blown currency crisis.
Wittaya Supatanakul, an adviser for the international banking group at Bangkok Bank, said the country's largest bank did not expect a significant impact if the Vietnamese dong were sharply devalued.
''[Bangkok Bank] will continue its current investment plan in Vietnam, although we along with other banks have been affected by the lack of liquidity in the market,'' he said.
The Vietnamese economy is teetering on the verge of a currency crisis as authorities wrestle with inflation as high as 25%, a sharp decline in the equities market and deteriorating economic conditions in the global market.
Based on forward contracts in the currency markets, the dong is up to 40% overvalued compared with the US dollar, as the country's trade and current deficits have soared due to the soaring cost of oil imports.
The State Bank of Vietnam on Tuesday announced a minor depreciation of 2% in the dong's official reference rate and a rise in policy interest rates to 14% from 12%. The rate hike also pushed the ceiling for deposit and lending rates to 21% from 18%, as the central bank tries to tighten monetary policy to slow economic growth and inflationary pressure.
The central bank has also moved to curb bank lending growth at less than 30% this year compared with 33% last year.
Limits have also been imposed on lending to the property sector and for margin lending for share trading to curb asset speculation.
The controls have hit asset prices hard, with property prices in Vietnam down 30% to 35% over the past six months. The Vietnamese stock exchange has also lost 65% in value over the past 14 months.
Mr Wittaya said Bangkok Bank had been ''slightly affected'' by the poor macroeconomic situation in the country, adding that its outstanding loans were primarily to Thai and other foreign investors in the Vietnamese manufacturing sector.
Bangkok Bank operates two branches in Vietnam. Its Ho Chi Minh City branch has outstanding loans of US$340 million and its Hanoi branch $110 million.
''The bank does have to be more prudent in doing business in the country, given the uncertainties about the dong and the economy. We will focus on monitoring and helping our existing customers rather than expanding lending,'' Mr Wittaya said.
Paspun Suvanchinda, an executive vice-president at Siam Commercial Bank, said the bank was taking a similarly cautious line.
SCB operates a joint venture with the Vietnam Bank for Agriculture and Rural Development, the country's largest state-owned bank, as well as with the CP Group.
The three partners hold equal shares in VinaSiam Bank, which operates six branches in Vietnam and a loan portfolio of around US$90 million.
At the Export-Import Bank of Thailand, officials said the quality of loans exposed to the Vietnamese market had not been affected to date.
Kittiporn Limpisvasti, an Exim Bank senior executive vice-president, said most of the bank's outbound projects to Vietnam were relatively small.
''But we are reviewing how the economic situation in Vietnam might affect credit quality and the viability of various business ventures,'' he added.
Mr Kittiporn said existing loans for Thai projects in Vietnam were all current. The Exim Bank also had another 10 to 20 million baht worth of exposure in the form of export guarantees, which to date have not yet been exercised.
''If the crisis deteriorates, we will likely stop our transactions. But the situation is not yet at that point,'' he added.
One problem facing outside analysts was in gaining accurate economic data about the state of the Vietnamese economy, Mr Kittiporn said.
Foreign reserve figures vary from as low as $15 billion to as much as $26 billion, depending on how the numbers are calculated. Trade deficit, at $14.4 billion for the first five months of the year, would seem to be highly alarming for the country's external finances, although authorities say the gap can be covered by foreign investment flows and aid from foreign countries.
''Certainly we hope that Vietnam can find a way to handle the crisis, and possibly learn from Thailand's own experience during the 1997 crisis,'' Mr Kittiporn said.
''Actually, one major difference between Thailand then and Vietnam now is the fact that in 1997, Thailand had huge foreign debt levels, much more than Vietnam has today.''
Vietnam hikes rates; adjusts currency downward
By Lisa Twaronite, MarketWatch
Last update: 3:23 p.m. EDT June 10, 2008Comments: 3SAN FRANCISCO (MarketWatch) -- Vietnam's central bank tightened policy in the face of inflation Tuesday, and also adjusted its official exchange rate downward in an effort to thwart currency speculation.
The State Bank of Vietnam increased its refinancing rate on Tuesday to 15% from 13% and the discount rate to 13% from 11%. The central bank also said it would set Wednesday's official exchange rate at 16,461 dong per U.S. dollar, compared with 16,139 dong on Tuesday.
The dong is allowed to trade 1% above or below the official exchange rate. But last week, a dollar bought as much as 18,500 dong in the black market, as investors bought dollars to hedge against soaring prices.
"I think the implication of the move is that the effective spot dong rate might now appreciate a couple of percent, as it is still 4% to 5% above the new official rate," said James Malcolm, global emerging markets currency strategist at Deutsche Bank in London.
Last week, Moody's Investors Services cut its outlook on Vietnam's key ratings from positive to negative, becoming the third of the three major ratings agencies to cut their outlook on the country. See full story.
Moody's cited "policy shortcomings in addressing inflationary and balance-of-payments pressures."
Vietnam's inflation rate surged to 25.2% in May.
The interest rate and currency moves likely signal that the policymakers recognize the need for both a tightening and a foreign exchange adjustment, and are carrying it out in a gradual and controlled manner, said Win Thin, currency strategist at Brown Brothers Harriman.
"We think Vietnam can manage the adjustment process well, and really don't see any destabilizing hot money flows," Thin said, such as those that flooded into Thailand and other South East Asian countries during the 1997 Asian currency crisis.
"We believe policy-makers will continue to engineer a gradual depreciation of the dong as the year progresses, but not by a huge amount, as a big 30% devaluation would boost inflation even higher," said Thin.
Vietnam's stocks have tumbled more than 50% this year, making them the worst performer in their asset class, as the country struggled with inflation and a hefty trade deficit. Read more on Vietnamese stocks.
Against that backdrop, the dong has been dropping against the U.S. dollar since it hit a multi-year high of 1.5820 in late March.
Lisa Twaronite reports for MarketWatch from San Francisco.
PRESS DIGEST - Vietnam newspapers - June 10
Mon Jun 9, 2008 10:37pm EDT
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More Business & Investing News... HANOI, June 10 (Reuters) - These are some of the leading stories in the official Vietnamese press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy.
- - - -
FINANCIAL NEWS:
THANH NIEN
-- Several banks continued to raise interest rates on dong deposits above 16 percent per year to attract dong depositors.
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-- Viet A Bank has raised interest rates on dong deposits to up to 16.5 percent per year, the highest yield on dong deposits offered by commercial banks.
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THOI BAO KINH TE VIETNAM
-- Depositors who put money in foreign currencies at banks can withdraw the whole principal and interest in foreign currencies, the Department of Foreign Exchange Management said in a document to refute a rumour that commercial banks would not allow depositors to withdraw their savings in foreign currencies.
-- Local authorities of Thua Thien - Hue province licensed a subsidiary of Singapore's Banyan Tree Group (BANY.SI: Quote, Profile, Research) to invest $875 million in a resort complex called Laguna Hue.
-- Gemadept Joint Stock Company GMD.HM will carry out the issue of 24.5 million additional shares that was scheduled in late 2007 or in the first quarter of 2008 but temporarily suspended due to the stock market's decline.
- - - -
ECONOMIC AND GENERAL NEWS:
SAIGON GIAI PHONG
-- Contractors have completed more than 90 percent of the construction of Dung Quat refinery and aimed to put the plant into operation on time by February. The refinery will meet about 30 percent of national oil product demand, officials said.
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TUOI TRE
-- Vietnam has had no bird flu outbreaks in the past 14 days, Deputy Agriculture Minister Vu Van Tam said.
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VIETNAM NEWS
-- Deputy Prime Minister cum Foreign Minister Pham Gia Khiem emphasised his wish to strengthen dialogue between Vietnam and the Vatican as a Vatican delegation visited the country.
-- Prime Minister Nguyen Tan Dung declared a new campaign against drug trafficking from June through August that includes more efforts to change prevention of illegal drug use.
- - - -
© Thomson Reuters 2008 All rights reserved
So based on what we see & Read latily -WHAT do investors in the DONG THINK will happen-----REVAL or DEVAL
REVALUATION=LESS Number of Dong to BUY US Currency OR
DEVALUEATION=US DOLLAR gets MORE DONG for the Buck.
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