Exchange rate adjustment has no immediate impacts on exporters
Vietnamese export enterprises said they are not likely to be affected by the State Bank of Vietnam (SBV)’s adjustment of the average inter-bank exchange rate between the VND and USD.
Illustrative image (Photo: VNA)Vietnamese export enterprises said they are not likely to be affected by the State Bank of Vietnam (SBV)’s adjustment of the average inter-bank exchange rate between the VND and USD and the extension of the trading band for commercial banks in the immediate future.
According to Dang Phuong Dung, Vice President and Secretary General of the Vietnam Textile Association (VISTA), although the adjustment benefits domestic enterprises’ export activities, enterprises will have to import input materials such as raw cotton and chemicals for dyeing at higher prices.
Fortunately, prices for those materials have been pegged in business contracts from the outset of this year, which protects the enterprises from exchange rate risks, Dung said.
The Hanoi Trade Corporation (Hapro) – which is seeking foreign markets for its agricultural products – also benefits from the exchange rate surge, said Hapro Managing Director Nguyen Thi Thu Hien, highlighting that the company gets payment in USD from exports while purchasing agricultural products for processing in VND.
Appreciating the exchange rate adjustment as a timely response to the Chinese yuan’s devaluation, Vice Chairman of the Vietnam Association of Seafood Exporters and Processors (VASEP) Nguyen Hoai Nam said the move would partly help domestic exporters compete against counterparts in India and China where the governments have reduced short-term lending interest rates or adjusted exchange rate.
He added that however, the adjustment is still modest and thus its impact is not so obvious.
Meanwhile, Vice Chairman of the Vietnam Steel Association Nguyen Van Sua believed that the move is a double-edged sword, likely to cause substantial issues for the steel sector, which is suffering from a trade deficit.
Vietnam’s steel sector imports over 9 billion USD worth of materials every year. In the first six months of this year, the country bought more than 6.9 million tonnes of steel from foreign markets at a cost of over 3.82 billion USD, yet it only gained 873,000 USD from exporting 1.2 million tonnes of steel.
According to Sua, while the current adjustment of 1 percent is yet to pose a big problem for the sector, difficulties will arise when more similar moves are taken in the future.-VNA
You should also see
VNA marks 70th anniversary of Dien Bien Phu Victory with various activities
The Vietnam News Agency (VNA) hosted an array of activities to celebrate the 70th anniversary of the Dien Bien Phu Victory (May 7, 1954 - 2024).
See more
Business
Japan's Takashimaya plans to expand investment in Vietnam
Takashimaya, a Japanese operator of upscale department stores, plans to open a shopping centre in Hanoi in 2026 that will be the company's first new location abroad in eight years, Japanese newspaper Nikkei reported.
Business
Localities get ready for fourth FDI boom
As the year 2024 is expected to witness the start of the fourth wave of foreign direct investment (FDI) to Vietnam, localities nationwide are getting ready to absorb foreign capital flows.
Business
Vietnam earns 1.43 billion USD from rice exports in Q1
ietnam in the first quarter of 2024 exported 2.18 million tonnes of rice, earning 1.43 billion USD, an increase of 17.6% in volume and 45.5% in value year on year. Meanwhile, the average export rice price also increased by 23.6% to $653.9 per tonne.
Business
Old loans must endure higher interest rates temporarily: central bank
The average lending interest rate for new loans by commercial banks is reported at around 6.4% per year, a decrease of 0.7 percentage point per year compared to the end of last year. However, borrowers with loans issued before the latest rate adjustment still must pay higher rates, according to the State Bank of Vietnam (SBV).
Business
Vietnam among top domestic infrastructure investors: Ambassador
Vietnam is one of the leading countries in Asia in terms of investment for infrastructure development, allocating 5.7% of its Gross Domestic Product (GDP) to projects in this field, said Ambassador Dang Hoang Giang, Permanent Representative of Vietnam to the United Nations (UN).
