Replies to post #987 on Vietnam Currency Discussion Board

[RICK C]

US, Viet Nam to strengthen trade, investment relations
Washington, Dec 22 (VNA) - The United States and Viet Nam share the goal of continuing to strengthen the trade and investment relationship between the two countries, said an official from the US Trade Representative (USTR).

Stephen J. Norton, Assistant Press Secretary of the USTR, was speaking with a VNA correspondent of the first Ministerial-level meeting of the Trade and Investment Framework Agreement (TIFA) Council convened in Washington DC on Dec 17.

The Head of the Vietnamese TIFA delegation was Nguyen Xuan Phuc, Minister-Chairman of the Government Office, and the US TIFA delegation was led by Susan C. Schwab, United States Trade Representative.

The meeting focused on Viet Nam 's implementation of its World Trade Organization (WTO) commitments as well as measures to further deepen trade and investment relations between the United States and Viet Nam .

According to Norton, the meeting provided for an extremely productive dialogue on the full range of priority issues.

"The United States and Viet Nam will continue to work together closely on the range of issues discussed during this meeting," he said. "Both sides agreed on a regular exchange of information under the TIFA to facilitate
this closer cooperation. The US will support Viet Nam's ongoing efforts to implement its WTO commitments and advance its economic reform agenda."

According to the official, in the area of agricultural trade, the two sides will continue their efforts to facilitate market access for key products such as poultry and beef for the US and tropical fruits for Viet Nam .

In services, the US and Viet Nam discussed coordination to ensure a smooth transition as Viet Nam liberalises its service sectors in line with its WTO commitments.

The US will continue to support Viet Nam's efforts to fully implement its commitments to provide strong protection for intellectual property rights for Vietnamese and foreign firms.

The two sides also agreed to cooperate on ways to enhance U.S. capacity building assistance to Viet Nam for trade-related reforms and to seek greater participation from the respective private sectors in the trade
dialogue.

The US and Viet Nam agreed to meet quarterly under the TIFA to assess progress on joint work already underway, discuss ways to address new issues as they arise, and to consider new initiatives.(VNA)



Today In Asia : Last Update : 08:04:28 22 December 2550 (GMT+7:00)

[RICK C]

Updated: New York, Dec 24 08:23London, Dec 24 13:23Tokyo, Dec 24 22:23

Economy

Bloomberg Press

Vietnam Widens Daily Trading Band for Dong to 0.75% (Update3)

By Beth Thomas and Nguyen Dieu Tu Uyen

Dec. 24 (Bloomberg) -- Vietnam widened the daily trading band for the dong, giving the central bank more scope to slow inflation by allowing the currency to strengthen.

The dong can now trade 0.75 percent either side of a rate set by State Bank of Vietnam each day, compared with 0.5 percent previously, according to Dao Xuan Tuan, head of foreign-exchange management at the bank.

The country has allowed the currency to strengthen by 1.3 percent since Aug. 20 as consumer-price inflation accelerated to a 10 percent annual pace in November, the fastest in more than three years. The dong is little changed in the year, following an 11-year run of depreciation designed to make the nation's exports more competitive.

Vietnam faces ``a dilemma with trade deficits growing and inflation picking up,'' said Masashi Kurabe, head of the foreign-exchange sales & trading group in Hong Kong at Bank of Tokyo-Mitsubishi UFJ Ltd., part of Japan's largest lender. ``The country may be aiming to reduce money supply'' by allowing currency appreciation, he added.

The dong gained 0.11 percent to 16,032.5 against the dollar as of 4:25 p.m. in Hanoi. It closed last year at 16,042.5. The central bank has devalued the dong every year since 1995.

The new band is ``to give commercial banks more flexibility in trading the dong and to go more in line with market rates,'' Tuan said in an interview from Hanoi today.

Trading Opportunities

The State Bank set a reference rate for the currency of 16,113 today, 0.4 percent weaker than its current price. The dong strengthened as much as 0.5 percent more than the reference rate on Dec. 21. The central bank last widened the band on Dec. 31, 2006, expanding it from 0.25 percent.

``It's good news for commercial banks,'' Ly Xuan Hai, chief executive officer of Asia Commercial Bank, Vietnam's biggest listed company, said in a telephone interview from Ho Chi Minh City. ``This opens up more opportunities for us to trade the dong now.''

Vietnam's restrictions on trading the dong mean that DBS Group Holdings Ltd. and Australia & New Zealand Banking Group Ltd. have been trading offshore derivatives contracts tied to the future value of the dong, known as non-deliverable forwards.

``A more flexible exchange rate could improve the effectiveness of monetary policy and buffer the economy from the effects of volatile capital flows,'' a report released by the International Monetary Fund and World Bank last week recommended.

Foreign Investment

Demand for Vietnamese stocks and rising foreign direct investment has put pressure on the dong to gain this year. Vietnam's currency strengthened to as much as 15,977 against the dollar on Feb. 13, the most since at least 1993. The benchmark VN Index of stocks reached a record high on March 12.

Vietnam's foreign investment jumped 69 percent this year to $20.3 billion, Thoi Bao Kinh Te Viet Nam reported today, citing the Ministry of Planning and Investment. The government expects economic growth to quicken more than 9 percent next year.

``Direct foreign investment has been increasing in Vietnam,'' said Kurabe. ``With China's employment costs rising, many foreigners are now trying to build factories in Vietnam.''

Hon Hai Precision Industry Co., the world's largest contract electronics manufacturer, plans to invest $5 billion over the next five years in Vietnam to make parts for personal computers, digital cameras and mobile phones. Hon Hai joins Taiwanese companies including Compal Electronics Inc. that have announced plans to set up factories in Vietnam to cut costs.

The trade deficit more than doubled to $10.47 billion from January to November as the country imported more machinery, steel, and fertilizer. The policy of weakening the dong has made the cost of goods that Vietnam imports more expensive in local currency terms.

To contact the reporter on this story: Beth Thomas in Hanoi [e-mail] .

Last Updated: December 24, 2007 04:46 EST