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Official affirms no depreciation of currency
Vietnam will not depreciate its currency (VND), and with US$20.7 billion in its reserves, the country can deal with any fluctuations to stabilise its monetary market, said Nguyen Van Giau, Governor of the State Bank of Vietnam.
Mr Giau made the affirmation at a June 19 tele-conference joined by domestic and foreign investors from Hanoi, Ho Chi Minh City, Hong Kong and Singapore.
He attributed the recent fluctuations in the exchange rate between the US dollar and the Vietnamese Dong on the black market to “psychological instability” among investors and the people, causing the monetary market to develop unhealthily.
“The State Bank of Vietnam will take tight and flexible measures to control the market,” said Mr Giau.
Businesses complained that they have encountered difficulties in accessing capital sources for production after the Government took measures to curb inflation, including tightening its monetary policy and increasing bank interest rates.
Mr Giau replied, “Businesses will surely be affected by market developments, but we need them to shoulder the burden with the Government at this moment. Businesses have no choice but to restructure themselves and cut down on expenditures to lower the price of their products.”
According to the Governor, in the first half of this year, credit organisations have achieved a growth rate of 20 percent. But in the face of high inflation, they have to look for the most reliable businesses.
Given the difficulties caused by the global economic slowdown, high domestic inflation and natural disasters, investors were interested in Vietnam’s macro-economic policies to ensure sustainable development.
Minister of Finance Vu Van Ninh, who chaired the tele-conference, affirmed that Vietnam has implemented a score of measures to stabilise the domestic monetary market to support export activities and the implementation of investment projects. He affirmed that the Government will cut down on public expenditures, including 25 percent of investment capital sourced from the sale of Government bonds, worth nearly VND10 billion.
Mr Ninh stressed that Vietnam’s investment environment remains attractive to foreign investors, with US$23 billion having been poured into the country in the past six months. He attributed the encouraging figure to the country’s transparent legal system.
“The Vietnamese Government is committed to ensuring foreign investors’ legitimate and long-term interests in the country,” Mr Ninh stressed. “The Government will cooperate with foreign investors to iron out the snags to help them operate efficiently.”
The representative from the World Bank affirmed that there will not be any changes in donors’ plans to provide official development assistance (ODA) capital for Vietnam. He quoted statistics, saying by June 30 approximately US$1.2 billion worth of ODA capital will have been disbursed in Vietnam – a figure which is higher than last year. However, he said that the World Bank will consider loans with less preferences to Vietnam.
In response to investors’ worries that Vietnam is facing a high deficit in its trade balance, Deputy Minister of Industry and Trade Nguyen Thanh Bien said that Vietnam has implemented strong measures to increase exports and reduce imports. As a result, exports in May increased by 15 percent against April, reaching US$5.75 billion, while imports fell by 7 percent, equivalent to US$580 million, against April.
Concluding the conference, Minister Ninh described the current difficulties as temporary and affirmed that Vietnam will apply synchronous measures to rein in high inflation and stabilise the macro economy in the medium- and long-term periods.
VOV
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