Illustrative image (Photo: thuongmai.vn) Hanoi (VNA) – The fluctuation offoreign exchange in the first quarter was due to a sharp rising import value,according to the National Financial Supervisory Commission (NFSC).
Statistics from the General Department of Customs indicated that the country’strade deficit in the first quarter of this year was roughly 1.9 billion USD,compared with a trade surplus of roughly 1 billion USD inthe same period in 2016. The trade deficit in Q1 of 2017 was equal to 4.4percent of the country’s total export revenue in the period.
Expertssaid that the main reason for the rising import value was the strong increase inthe demand for imported machinery and equipment, due to stronger economicgrowth prospects in 2017.
TheNFSC, the Government’s financial watchdog, said that after declining in thefirst month of the year, the VND/USD exchange rate at commercial banks has risen significantly since mid-Februaryand often approached the cap listed by the central bank. By March 20, thedollar was quoted at 22,820 VND per USD, up roughly 0.13 percent against early this year.
In the unofficial market, the dollar also accelerated to hit 23,000 VND per USD inthe first half of February. It has cooled down since and is now close with thatlisted by commercial banks.
Thecentral bank’s reference exchange rate by March 20 was also adjusted up 0.47percent, the NFSC said.
The NFSC also forecast that the country’s foreign currency supply source in theentire 2017 could be at a disadvantage compared with last year due to the tradedeficit. Last year, the country’s trade surplus hit an 11-year-high of morethan 2.52 billion USD. However, a high trade deficit was forecast for 2017.The government has planned a trade deficit that was to equal roughly 3.5 percentof the country’s total export value.
Thecountry’s foreign currency supply source this year was also forecast to reducein the wake of a restriction of official development assistance (ODA) sourcesfrom July this year. According to released itineraries, the World Bank is dueto stop the preferential ODA sources for Vietnam from July this year.
NFSC also noted the volatility of the yuan and stated that a sharp devaluationin the currency would make a big negative impact on Vietnam’s economy due to the country’s rising trade deficit with China. The trade deficitrose to 28 billion USD in 2016 from 23.7 billion USD in2013.
If compared with the GDP, Vietnam’s trade deficit with Chinawas 14 percent, which was much higher than the 2 percent trade deficit of theUnited States (US) and China, the NFSC noted.
Thecommittee forecast that the US Federal Reserves (Fed)’s interest rate hike hasnot caused any pressure on the foreign exchange in 2017 as the interest rateof dong depositsare still more attractive than the dollar deposits.
According to the central bank, interest rate averages between 4.8 percent and 5.4 percentper year for dong deposits below six months, 5.6 percent to 6.7 percentper year for 6- to 12-month dong deposits and 6.7 percent to 7.4 percent per yearfor dong depositsabove 12 months. The interest rate for dollar deposits is zero percent.-VNA
Statistics from the General Department of Customs indicated that the country’strade deficit in the first quarter of this year was roughly 1.9 billion USD,compared with a trade surplus of roughly 1 billion USD inthe same period in 2016. The trade deficit in Q1 of 2017 was equal to 4.4percent of the country’s total export revenue in the period.
Expertssaid that the main reason for the rising import value was the strong increase inthe demand for imported machinery and equipment, due to stronger economicgrowth prospects in 2017.
TheNFSC, the Government’s financial watchdog, said that after declining in thefirst month of the year, the VND/USD exchange rate at commercial banks has risen significantly since mid-Februaryand often approached the cap listed by the central bank. By March 20, thedollar was quoted at 22,820 VND per USD, up roughly 0.13 percent against early this year.
In the unofficial market, the dollar also accelerated to hit 23,000 VND per USD inthe first half of February. It has cooled down since and is now close with thatlisted by commercial banks.
Thecentral bank’s reference exchange rate by March 20 was also adjusted up 0.47percent, the NFSC said.
The NFSC also forecast that the country’s foreign currency supply source in theentire 2017 could be at a disadvantage compared with last year due to the tradedeficit. Last year, the country’s trade surplus hit an 11-year-high of morethan 2.52 billion USD. However, a high trade deficit was forecast for 2017.The government has planned a trade deficit that was to equal roughly 3.5 percentof the country’s total export value.
Thecountry’s foreign currency supply source this year was also forecast to reducein the wake of a restriction of official development assistance (ODA) sourcesfrom July this year. According to released itineraries, the World Bank is dueto stop the preferential ODA sources for Vietnam from July this year.
NFSC also noted the volatility of the yuan and stated that a sharp devaluationin the currency would make a big negative impact on Vietnam’s economy due to the country’s rising trade deficit with China. The trade deficitrose to 28 billion USD in 2016 from 23.7 billion USD in2013.
If compared with the GDP, Vietnam’s trade deficit with Chinawas 14 percent, which was much higher than the 2 percent trade deficit of theUnited States (US) and China, the NFSC noted.
Thecommittee forecast that the US Federal Reserves (Fed)’s interest rate hike hasnot caused any pressure on the foreign exchange in 2017 as the interest rateof dong depositsare still more attractive than the dollar deposits.
According to the central bank, interest rate averages between 4.8 percent and 5.4 percentper year for dong deposits below six months, 5.6 percent to 6.7 percentper year for 6- to 12-month dong deposits and 6.7 percent to 7.4 percent per yearfor dong depositsabove 12 months. The interest rate for dollar deposits is zero percent.-VNA
VNA
