Vietnam’s forex reserves are estimated at
some $17 billion, exceeding the pre-crisis rate of 2008, said the Asian
Development Bank (ADB) in a recent meeting.
As of
the end of the first quarter, the reserve had risen by around 25 per cent over
late 2011 following the active move of the central bank to buy foreign
currency, according to the ADB.
The
reserve rose by $3.5 billion compared to the rate the ADB announced in mid-2011
said Dominic Mellor, an ADB expert at a press conference to announce the
economic outlook 2012 report in Hanoi.
Specifically,
by the end of 2011, foreign currency reserves were equivalent to the
pre-economic crisis rate.
Mr.
Mellor said he believed the reserves had climbed from $13.8 billion at the end
of last year. The State Bank of Vietnam (SBV) does not publish forex reserves
on a regular basis, according to AFP.
The
Vietnamese dong has been stable so far this year, with the mid-point rate set
daily by the central bank at VND20,828 per dollar, unchanged since late
December, following a lower-than-expected trade deficit in 2011 of $9.5
billion, AFP reported.
However,
Vietnam’s improved forex reserves are equivalent to only about two months of
imports, a relatively "fragile" level that may cause difficulties
when the country faces unfavorable international conditions.
Another
risk for Vietnam is a slow GDP growth rate, with a projected rate of only
5.5-5.7 per cent in 2012, lower than the Government's expectations of about 6
per cent, the ADB also mentioned in the report.
Thus,
within a year, the organization has twice lowered Vietnam's growth rate outlook
for a total of 1 - 1.2 per cent. The forecast for 2013 given in this report was
at 6.2 per cent.
Regarding
the causes for the adjustment, the ADB said that Vietnam may suffer negative
effects from unfavorable conditions in consumption, both domestically and
internationally.
Local
hurdles may be caused by economic constraints, and workers’ incomes have not
kept up with inflation rates.
As for
inflation, the ADB expert expressed that he was heartened by the achievements
that Vietnam has made in recent years and added that this year's CPI rate could
be in the single digits.
However,
as this year comes amidst unstable food and fuel supplies globally, the agency
said that the restriction of inflation in Vietnam may face many challenges.
The ADB
is also particularly concerned with the difficulties faced by enterprises,
especially private ones, in the current climate, as they are badly affected by
the tightening of credit after a period of rapid growth.
The
organization also found no significant return of foreign investors to the
manufacturing sector.
The ADB
also recommended that the State Bank of Vietnam raise the credit growth ceiling
from 14 per cent to 18 per cent to offer more abundant resources for the
economy.
However,
the interest rate issue should be carefully processed.
Speaking
at the press conference, ADB national director Tomoyuki Kimura said the main
message of the bank in this report is the recommendation that Vietnam should
not "drop the rate too fast" in order to avoid interest rate risk on
short-term macroeconomic circumstances.
SBV
should also take drastic moves to ensure the safety of the banking system as
the top target and try to develop a system of diversified financial
institutions.
Finally,
the ADB added that Vietnam should continue to enhance transparency and expand
positive information about the reform process in order to create trust among
the people as well as investors.
Tuoi
Tre
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com
No comments:
Post a Comment