Malaysia News Gazette

Hanoi: Though the State Bank of Vietnam (SBV) has announced it is selling the US dollar to intervene in the USD/VND exchange rate since April 19, the greenback price has remained high, which has been directly affecting many domestic enterprises.

The USD/VND exchange rate listed at VietinBank and BIDV on April 23 was at 25,180 VND and 25,485 VND per USD dollar for buying and selling, an increase of 20 VND compared to the previous session.

Vietcombank’s rate also stood high at 25,145 VND and 25,485 VND per dollar for buying and selling.

This was the sixth session that the selling price of the dollar at banks has consecutively broken its peak, moving closer to the threshold of 26,000 VND per dollar.

On the unofficial market, the dollar price on April 24 also increased by 90 VND per dollar for buying and 110 VND per dollar for selling compared to last week to reach 25,770 VND and 25,870 VND per dollar for buying and selling, respectively.

In the context of the sharp appreciation of the dollar, the SBV on Apr
il 19 announced it was selling the greenback to banks with negative foreign currency status at the price of 25,450 VND per dollar, 23 VND per dollar lower than the SBV’s cap, to influence the exchange rate. This move is expected to help cool down the domestic exchange rate but it is continuing to accelerate due to the high level of the dollar in the international market.

The sharp increase in the dollar price has caused difficulties to many domestic companies.

A seafood import company in Hanoi, which declined to be named, calculated that for each 100,000 USD order paid to a partner, it would have to spend an additional 100-150 million VND.

Nguyen Dang Hien, General Director of Tan Quang Minh Company, said the beverage manufacturing industry is facing many difficulties, including increased exchange rates.

According to Hien, his company currently has to import some types of orange juice, some flavours and plastic beads from other countries and most have to be paid in the dollar, which has increased producti
on costs by 4-5%. However, product selling prices have not increased for many months due to weak purchasing power.

To limit damage from the rising exchange rate, the Tan Quang Minh Company is trying to promote the search for domestic raw material sources to replace imports, and increase exports to markets paying in the dollar, Hien said.

Director of SKD Vietnam Mechanical Company Nguyen Van Ket said companies’ plans will not be affected if the Vietnamese dong depreciates by some 2-3% this year as previously forecast. However, the dong has so far strengthened by nearly 5%, while raw material prices, input and international transportation costs remain high due to rising gasoline price, which cause more difficulties for businesses.

In the context of the rising exchange rate, experts recommend that importing businesses need to pay attention to exchange rate risk prevention tools, and carefully consider the terms in foreign currency loan contracts.

Besides, it is also necessary to maximise domestic resources a
nd find alternative domestic partners to gradually reduce dependence on import markets to lower costs and limit risks when the world market fluctuates.

In addition, businesses should also choose banks with good trade support capabilities, and consider using derivative financial instruments and swap contracts, appropriately and in accordance with regulations, to reduce risks when exporting in the context of the current exchange rate fluctuations./.

Source: Vietnam News Agency

Hanoi: The State Bank of Vietnam (SBV) on April 23 took some moves like issuing treasury bills (T-bills), further employing T-bills as an open market operation (OMO), and stipulating liquidity and interest rates in the inter-bank market in the face of surging USD/VND exchange rates.

The central bank lent nearly 36 trillion VND (1.4 billion USD) for a 14-day term to nine members via the OMO channel. The bid-winning interest rate rose to 4.25% per year from 4% per year as recorded recently.

The seven-day loan, issued on April 16 via the OMO channel, also matured on April 23 with total value approximating 12 trillion VND.

The bank also continued to issue 2.15 trillion VND worth of 28-day T-bills with an interest rate of 3.73%. Two members won the bidding.

Besides, the T-bills issued on March 26 also became mature on April 23, enabling the central bank to inject 3.7 trillion VND back to the market.

Experts said the maintenance of inviting bids for T-bills will help the SBV form a steady zone of floor prices
for inter-bank interest rates via bid-winning rates. The concurrent use of T-bills and OMO aims to serve the twin targets of guaranteeing liquidity for the banking system to maintain low interest rates in the market and easing pressure to narrow the USD/VND exchange rate differences in the inter-bank market.

Talking to the press, Tran Duc Anh, Director for macro-economy and market strategy at the KB Securities Vietnam JSC, held that the SBV has carried out many measures for stabilising exchange rates like attracting money flows via T-bills in the open market.

However, such moves are still not strong enough to stabilise foreign exchange rates as inter-bank interest rates keep growing. Therefore, the bank may take stronger interventions in the time ahead, he opined.

SBV Deputy Governor Dao Minh Tu affirmed that exchange rates form a critical factor in macro-economic governance. They affect not only the value of the Vietnamese dong or people’s purchasing demand but also policies, macro-economic stability, inf
lation control, market psychology, and investors’ trust.

Therefore, the SBV always views stipulating exchange rates as one of the extremely important tasks, he said, noting that it will continue flexible governance to ensure exchange rates changes in line with the common trend and the foreign currency balance is guaranteed for legal demand in the market.

On April 23, the central bank set the daily reference exchange rate at 24,275 VND per USD, up 3 VND from the previous day./.

Source: Vietnam News Agency

Singapore: Five Vietnamese enterprises operating in the fields of food and hospitality are attending the Food and Hotel Asia (FHA) 2024 which is taking place in Singapore from April 23-26.

This year’s event attracts over 1,500 businesses from more than 50 nations and territories and expects to welcome 60,000 visitors.

Vietnamese booths draw the attention of many visitors with their wide variety of products such as confectionary, beverage, frozen foods, pepper and other spice products, and canned and dried fruit.

Speaking at the opening ceremony, Singaporean Minister of Trade and Industry Low Yen Ling said that FHA-F and B is an equal playground for enterprises to seek collaboration in today’s free trade agreement networks. It also aims at internationalisation, continuous innovation and sustainable development in the field of food and hospitality.

Vietnamese Ambassador to Singapore Mai Phuoc Dung emphasised that the participation of Vietnamese enterprises has shown their enormous efforts in studying food
and hospitality development trends in the world. He affirmed that the event also helps to promote more Vietnamese product to foreign markets.

Through the event, Vietnamese enterprises anticipate opportunities to meet potential partners, bringing more Vietnamese agricultural brands to international market.

Michael Duck, Executive Vice President of Informa Markets stressed that Vietnam is a supplier of many important food items and the event is an occasion to expand the market further./.

Source: Vietnam News Agency

Hanoi: Another bidding session for 16,800 taels of gold bullion will be held on April 25, the State Bank of Vietnam said in a statement.

The bank said the auctions aim at ensuring stable, transparent, and effective operation of the domestic market.

Bidders need to deposit 10% of their purchase value. Each is allowed to place order for at least 1,400 taels and at most 2,000 taels.

State-owned gold producer and distributor Saigon Jewelry Company and Asia Commercial Joint Stock Bank (ACB) bought 3,400 taels out of the16,800 offered by the central bank during the auction on April 23. The gold was purchased for 81.33 million VND (3,195 USD) per tael at the highest, and 81.32 million VND at the lowest, against the base price of 81.30 million VND.

Economists said bidders were prudent at the auction on April 23, with only two among the 11 participants winning bids, adding psychological factor has affected the domestic demand for gold in recent time.

SJC gold prices rebounded following the auction, at 82.3 millio
n for buyers and 84.3 million for sellers, up 1.3 million and 1 million VND per tael, respectively, at 13:14 on April 24.

Meanwhile, Doji gold prices rose 2 million VND and 1.5 million VND to 82 million VND for buyers and 84 million VND for sellers./.

Source: Vietnam News Agency

Hanoi: Standard Chartered Bank has lowered Vietnam’s GDP growth forecast in 2024 to 6% from the previous 6.7% due to lower-than-expected Q1 growth and global trade headwinds.

However, it is still an improvement from 5% in 2023. The country’s Q1 GDP growth moderated to 5.7% (from 6.7% in Q4-2023). The bank lowered Q2 year-on-year growth forecast to 5.3% (from 6.3%) and Q3 to 6%. But Q4 growth is expected to be recovered to 6.7%.

According to Standard Chartered’s economist in its recent macro-economic updates about Vietnam, trade, a key source of growth and investment for Vietnam also faces short and long term challenges. However, Vietnam’s recovery remains intact despite risks. Retail sales growth was still robust in Q1.

Standard Chartered also lowers 2024 inflation forecast to 4.3% from 5.5 % to reflect lower-than-expected Q1 inflation. The bank expects rates to stay on hold at 4.5% until end-Q3 and could be raised by 50 bps in Q4 in response to growth-driven inflation.

‘Vietnam is improving its position
in global supply chains. Foreign investment continues to be attracted by a favourable investment environment and potential ramp-up of US-China trade tensions,’ said Tim Leelahaphan, Economist for Thailand and Vietnam, Standard Chartered. ‘With economic recovery starting to gain momentum, we think there will be less need to provide monetary policy support’, he added.

According to Tim, there is a balanced view on the Vietnamese given improvements on the external front and reserve rebuilding. Strong export growth provides some support for the currency. Imports point to further gains. The bank forecasts a current account surplus of 3.5% GDP in 2024./.

Source: Vietnam News Agency

Hanoi: The State Securities Commission of Vietnam (SSC) recently held an online working session with the World Bank (WB) and the Asia Securities Industry and Financial Markets Association (ASIFMA) to discuss ways to remove obstacles related to criteria for upgrading the Vietnamese securities market.

Co-chaired by SSC Chairwoman Vu Thi Chan Phuong and Senior Financial Sector Specialist of the WB in Vietnam and Coordinator of the Financial Sector Programme Ketut Kusuma, the event focused discussions on the contents of the draft decree amending and supplementing certain provisions on securities trading, transaction clearing and settlement, operations of securities companies and market information disclosure.

Speaking at the event, Phuong said the draft decree has undergone in-depth consultation through various channels, including the SSC’s website, seminars, and working sessions with domestic and foreign experts.

Feedback from ASIFMA members at the meeting is particularly valuable, as it will help refine the
draft decree to align with international practices, she said.

The session addressed critical issues, such as pre-funding requirement, payment processing procedures for foreign investors, and overall settlement capability of the Vietnamese market.

By addressing these concerns, the SSC hoped to create a more attractive and efficient market for both domestic and foreign investors, ultimately paving the way for Vietnam’s securities market to have its status lifted from “frontier” to “emerging”./.

Source: Vietnam News Agency

Ca Mau: A networking conference was held in the Mekong Delta province of Ca Mau on April 24, in a bid to connect 54 local enterprises, mostly operating in the seafood sector, to their Chinese peers.

In his remarks, Chairman of the provincial People’s Committee Huynh Quoc Viet said this event marks the beginning of a new phase in the cooperative relationship between the province and Chinese localities. He expressed his belief that it will lead to the signing of contracts and implementation of many programmes.

Wei Huaxiang, Consul General of China in Ho Chi Minh City, considered the meeting a practical activity to carry out common perceptions between the two Parties and countries, tightening their cooperation and friendship.

He cited incomplete statistics that about 500 Chinese firms and customers annually place orders to purchase shrimp, crabs, and other seafood products from Ca Mau. Therefore, in the future, the sides’ business communities should learn about each other’s customs and cultures, serving long-
term and practical partnerships and creating mutual benefits.

He pledged the Chinese Consulate General in HCM City’s willingness to act as a bridge facilitating their connection and trade.

On the sidelines, Ca Mau firms showcased their fisheries products and specialties recognised under the One Commune, One Product (OCOP) programme.

In 2023, trade between Ca Mau and China reached 97 million USD, accounting for a very modest proportion of the overall Vietnam-China trade./.

Source: Vietnam News Agency