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Interest rates to fall in second half
Interest rates would remain high till the second quarter but would fall slightly in the latter half, Vice Chairman of the National Financial Supervision Committee Le Xuan Nghia said on Mar. 15
Nghia told a conference on the macroeconomic situation and corporate tactics that the slight fall might be a result of the reallocation of financial resources, as well as the cuts of public investment and spending.
Instead, more capital would be spent on the private sector which would help cool down interest rates and cheer up stocks.
The vice chairman remained optimistic on the exchange rates issue, believing the forex market would soon turn stable.
He said the widening gap in the exchange rate wasn't due to the nation's trade deficit, but rather was caused by the country's high inflation rate compared to the US inflation rate.
"If the exchange rate followed the inflation rate, the dong would appreciate 13 per cent against the dollar.
"Due to the weakness of the US dollar against other currencies, our foreign exchange rate is now reasonable," he said.
The forex matter could settle down if the Government continued stabilising inflation. However, if the volatility continued it would be due to confidence, which couldn't be changed in a day.
Nghia said the gold price could peak at US$1,600 per ounce in June-July after which it may fall sharply, depending on the Chinese reserves policy.
If China determined to buy gold for its foreign reserves, the gold price would increase, he said, adding that if the US achieved positive business growth and the US dollar rose, the gold price would drop because China would buy gold from Chinese companies. Looking at the real estate industry, Nghia foresaw the Ha Noi property market rising again from September or October.
"The Vietnamese real estate market seems to have the most potential in the Asian region thanks to the fact migration to the cities is stronger than in Singapore and Hong Kong."
Nghia said there might not be a real estate bubble because the income per capita was still low.
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