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Exporters benefit from stronger dollar
The rising value of the US dollar over the dong this month will help exporters stabilise business performance and production following a recent period in which a devalued dollar and rising input costs had lessened the profitability of exports.
The dollar-dong exchange rate offered by both commercial banks and on the black market has risen recently so that, yesterday, a dollar was valued at VND16,170/16,177 by Vietcombank and VND16,400/16,440 on the open market, compared to VND15,493/15,500 a few weeks ago.
Most export contracts, even to the EU, are paid in US dollars, so fluctuations in the greenback have immediate impacts on domestic exporters.
Thanh Dat Garment and Textile Export Co director Tran Thanh Binh said the value of his company’s export contracts had effectively risen more than 1 per cent this month due to a more favourable exchange rate.
The increasing value of the dollar could add millions of dong of profit to each export contract, he said.
The director of a Ha Noi – based agricultural export company, who asked not to be named, said additional profit gained from the increasing value of the dollar might seem insignificant when factored into a single export contract but was enormous once accumulated over successive contracts.
The increasing value of the dollar has also made exporters a little less nervous about commiting to large and long-term export contracts and fixed prices.
Lu Ngoc Hung, director of a garment and textile export firm in HCM City, which cut a third of its labour force last month due to the increasing input costs and the devaluation of the dollar, expected that the increasing value of the dollar against the dong would help his company gradually reach to its old production levels.
VNN
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