|
Vietnam reserves to cover only 1.6 months imports
Vietnam's foreign reserves can cover only 1.6 months of imports, the lowest rate among emerging East Asian countries, the Asian Development Bank said in its semi-annual "Asian Economic Monitor" released late last month.
Foreign reserves were now estimated at $13 billion, the bank said.
Continued high current account deficits and low foreign reserves had forced Vietnam to devalue the dong by 9.3 percent in February, making it the only currency to depreciate significantly against the US dollar.
Besides concerns about accelerating inflation - Vietnam recorded an inflation rate of 20.8 percent in June, the highest in emerging East Asia - Vietnam's banking system was also threatened by liquidity risks after the ratio of loans to deposits hit 105.9 percent at the end of March, second only after South Korea.
Vietnam, as well as emerging East Asian countries, needed to adopt a more flexible monetary approach in response to potentially persistent and volatile commodity-driven inflation, and greater exchange rate flexibility that could help mitigate the effects of global commodity price surges on domestic prices.
Policymakers could also use structural and fiscal policies to boost supply and increase economic flexibility when responding to commodity price changes.
There was need for greater cooperation to ensure adequate trade in food and energy, effective commodity market regulation, and appropriate macroeconomic policy to manage commodity-price volatility and inflation.
Vietnam's GDP growth rate is forecast to reach only 6.1 percent this year, lower than the Vietnamese National Assembly's target of 7-7.5 percent. It is expected to grow by 6.7 percent in 2012, according to the report.
Surging inflation, a weak post-tsunami economic recovery in Japan, and debt woes in the US and Europe threatened East Asia's economic outlook.
The East Asian region faced risks that also included more volatile financial markets and destabilizing inflows of short term capital, also known as "hot money."
The ADB's economic growth forecasts remain unchanged from April, with East Asia forecast to grow at nearly 8 percent this year and next.
But it has indicated that forecasts for a few countries including China could be downgraded.
tuoitrenews
|
