IMF: Vietnam needs to strengthen the sentiment dong
Forex October 12th, 2009
International Monetary Fund, Vietnam needed to assess the balance of payments and increase confidence in the dong currency to strengthen the economic growth of at least 6% this year.
Vietnam economic growth at lowest level in a decade by 5.3% last year. The country also experienced a trade deficit of U.S. $ 12.25 billion in 2009 after a surplus in the quarter I. Vietnam is also forced to devalue the dong buying surge following the U.S. dollar and gold by the public.
IMF Senior Representative in Vietnam Benedict Bingham said that growth this year largely determined by the balance of payments.
“If the government can mestabilkan macroeconomic conditions and created a more positive sentiment toward dong, I think 6% growth target could only be achieved,” he said.
The IMF last month reported the government stimulus package hit Vietnam’s balance of payments last year, threatening the country’s economic stability. “The cause of pressure on the balance of payments is a combination of increasingly wide trade deficit and the weakening sentiment on the dong, especially by Vietnamese investors,” said Bingham.
Traded at 18,474 dong per U.S. dollar at 2 pm in Hanoi, is lower than the black market exchange rate of about 19,300. The government only allows the currency to fluctuate 3% per day.
The central bank devalued the dong in November after a foreign exchange between the official and black market soared 10 times, more than 11%.
Johanna Chua, head of Asian economic research at Citigroup Inc., mengatkan skspor Vietnam should strengthen this year, among them due to the more competitive exchange rate.
Shipping to other countries rose 12% in December to U.S. $ 5.25 billion from U.S. $ 4.69 billion in November. Garment exports rose 12% to U.S. $ 820 million, while footwear products increased 22% to U.S. $ 420 million.
Bingham said export performance is relatively stable during December and imports lower than estimated, helping to improve the trade gap.
Inflation in Vietnam rose to 6.52% in December from 4.35% the previous month in line with growth of 6.9% in the quarter IV.
“The authority should look at inflation, especially if commodity prices continue to rise this year,” explained Bingham.
