Prime Minister Nguyen Tan Dung has just given a nod to the State Bank of Vietnam, the country’s central bank, to work on plans to further devalue the dong as part of efforts to boost exports and curb trade gap.
The move is part of a series of demand-stimulus policies Mr Dung who chaired a meeting on Wednesday urged to complete and start to enact them right in February with the focus on maintaining production and job generations, the state-run Phap Luat TP Ho Chi Minh newspaper said.
Meanwhile, the Information and Economic Forecasting Center under the Ministry of Planning and Investment predicted that the VND/USD will fluctuate VND17,300 and VND18,500 near term. Dollar on the black markets tended to rise these days.
The VND/USD rate is quoted Thursday by the SBV at VND16,977, lower than VND16,978 on Wednesday.
The center said over the past months the dong has been stably pegged to the US dollar which appreciated sharply, therefore the dong did strengthen also. Currently, the dong appreciated 10 per cent against euro and 5 per cent to 7 per cent against currencies in the region.
A paradox is seen in forex markets when commercial banks cannot buy dollars while black markets are full of the greenback despite recently devaluing 1 per cent of the dong against dollar by the SBV on December 25, the Saigon Tiep Thi newspaper said.
“Banks are trying to persuade exporters to resell dollars,” Tran Phuong Binh, director of Dong A Bank was quoted by the Saigon Tiep Thi newspaper as saying. Binh is also concerned over “greenback fevers” now.
Leaders of several investment management funds said it will take them five to seven days to collect US$10 million while they could buy that sum in an intraday session, the paper said.
The Kim Eng Securities forecast that the dong will depreciate 14 per cent against US dollar in the next 12 months.
Vietnam’s forex reserves were estimated at US$22 billion by end-November of 2008, equaling 12 weeks of imports, much lower than 17 weeks of imports in 2007, VietnamNet said.
The government has just announced its plans to issue dollar-denominated g-bonds this year to finance key projects and offset the budget deficit this year.
This year, Vietnam’s national assembly approved cutting budget deficit to 4.82 per cent of the country’s GDP value, lower than 4.95 per cent last year. (Local sources)
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