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Dong devaluation sets off consumer price hikes
The recent devaluation of the dong by more than 3 percent has triggered price hikes on a wide range of imported products, with more rises expected next month.
The Vietnam Steel Corporation announced price hikes of between VND150,000 and VND250,000 per ton immediately after the dong devaluation was announced February 11
Other steel makers said they would consider raising prices this week.
Do Duy Thai, Chairman of Viet Steel Group, said his company was trying to keep prices stable but it may have to set higher prices next month.
Prices of imported scrap steel have already surged to US$353 per ton from the previous $320 per ton, and with the dollar becoming more expensive price hikes would be inevitable, Thai said.
The central bank this month devalued the dong by 3.25 percent and imposed a cap on dollar deposit rates. It was the third devaluation since December 2008, bringing the central bank’s daily reference rate down by a total of more than 11 percent in just over a year.
Importers of electronic and computer products also said there could be price hikes starting March.
Huynh Van Thi, Director of Petrosetco, a computer and mobile phone distributor, said local retailers would change their price tags following the dong devaluation because most hi-tech products in Vietnam are imported.
Lien An Thach, Sales Manager of the Cho Lon Electronics retail chain in Ho Chi Minh City, said right now prices remained unchanged as products purchased before the currency devaluation were still available. Distributors would have to inform the retailer of their new prices 15 days in advance, he said.
Meanwhile auto manufacturers have already announced plans to raise prices. Toyota, for instance, said it would set prices 3 percent higher next month on higher forex rates.
Le Tham Duong, an economist at the Ho Chi Minh City Banking University, said the central bank’s decision to set a higher reference rate for the dong would help increase the dollar supply on the market, but a side effect of the move was that consumer prices could surge.
The government should tighten control over the market to prevent producers and retailers from taking advantage of the situation and raising prices arbitrarily.
Prime Minister Nguyen Tan Dung on Monday asked government agencies to take immediate measures to control prices after the Tet (Lunar New Year) festival.
Mai Phuong
thanhnien
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