VINACHEM

On April 11 the State Bank of Việt Nam decided to increase the rate of the US dollar it buys from credit institutions by VNĐ100 to VNĐ22,675.

The selling price was pushed to the prescribed ceiling.

The dollar’s value against the đồng, which had been steady for a while, has been on an upward trend recently.

A report by the National Financial Supervision Committee says the exchange rate showed signs of decreasing in January, but has increased steadily since mid-February and nearly reached the ceiling rate fixed by the State Bank of Việt Nam.

This upward trend has continued in April and the central bank had to raise its central rate by VNĐ5 to VNĐ22,316 to the dollar, up VNĐ175 or 0.7 per cent from late last year.

Following this, banks fixed their dollar selling price at VNĐ22,710-22,720.

One of the prominent economic happenings globally in recent times has been the appreciation of the greenback, which has affected most countries including Việt Nam.

The dollar has risen steadily as the US Federal Reserve has been continuously hiking the interest rate.

On March 15 the FED raised the rate by 25 basis points to 1 per cent, the second hike in three months, and expects to effect two more hikes this year and three next year.

In the face of the appreciation of the dollar, many countries will continue to devalue their currencies to support their exports.

Since Việt Nam’s public debts have been growing at a rate three times faster than its economic growth the Government has made herculean efforts not to devalue the đồng.

But this has been threatening to make the country’s exports uncompetitive, and so finally the Government has begun to act, tweaking the đồng’s value a few days ago.

Analysts said the exchange rate is affected not only by the dollar’s appreciation but also by other factors, domestic and global.

The flow of foreign exchange into Việt Nam this year is expected to be modest because from July this year the country will no longer get preferential loans in the form of official development assistance (ODA) since it has become a middle-income country.

Instead, the country would get preferential loans and, gradually, market-based financing.

A Central Economic Committee official said the low interest rate in the Vietnamese inter-bank market also contributed to putting pressure on the exchange rate.

The rate sometimes dropped to under 1 per cent.

These moves encouraged credit institutions to hoard the greenback, thus creating a shortage in the market, putting pressure on the exchange rate.

The rising inflation in recent months brought back fears about the robustness of the đồng, bringing more pressure on the exchange rate.

In the first two months of the year prices rose by 4.96 per cent year-on-year.

Rising imports combined with sluggish export growth sent the country’s trade deficit soaring in the first three months of the year to US$1.9 billion, or 4.4 per cent of exports.

The larger trade deficit also had an impact on the exchange rate, experts said.

Vietcombank removes deputy director general from Mizuho Bank

The Joint Stock Commercial Bank for Foreign Trade of Việt Nam (Vietcombank) has removed Yutaka Abe from his position of deputy director general, Vietcombank said on its website.

Accordingly, Yutaka, who acted a representative of Japanese bank Mizuho at Vietcombank since October 2012, was no longer a deputy director general of Vietcombank with effect from April 14.

Yutaka will take on another duty assigned by Mizuho Bank but still have a seat on Vietcombank’s board of directors.

Mizuho Bank holds 15 per cent stake at Vietcombank in a deal worth US$563.7 million made in September 2011.

On April 28, Vietcombank will hold its annual shareholders’ meeting in Hà Nội.

Vietcombank reported a pre-profit of VNĐ8.2 trillion ($360 million) in 2016, rising by 23.4 per cent over the previous year. In 2017, the bank aimed to earn a pre-tax profit of VNĐ9.2 trillion. - VNN