Government urges mobilisation of idle gold

Under the document, the Prime Minister required the governor to “continue focusing on doing research and implementing appropriate solutions to mobilise sources of foreign currency and gold among the people to serve development and investment”. At a meeting with the Prime Minister’s working group led by Government Office chairman Mai Tien Dung last month, the request to mobilise sources of foreign currency and gold was also stressed upon. At the meeting, Governor Le Minh Hung also expressed his views on the mobilisation of foreign currency and gold from the people by means of stimulating transformation in the past few years. The governor said overall macro-economic solutions of the past years were very successful, thanks to which foreign currency resources were transformed into Vietnamese dong.  In 2016, the State Bank of Vietnam (SBV) bought nearly US$10 billion to increase its foreign exchange reserve, a large amount of which came from foreign currency held by the people, thereby turning into dong.  Part of the resource was brought directly by the people into production and business while the other part was sent to commercial banks. “We think this is the best solution to mobilise resources in our context but still maintain macro stability, and not let fluctuation go out of control. Even with gold, in the last few years, we have not lost foreign currency to import gold; the people also are not pouring resources into buying gold as before, but utilising resources for…... [read more]

The Government Office last week sent a written document to the central bank governor, referring to the mobilisation of idle gold and foreign currency sources from the people. The Government Office last week sent a written document to the central bank governor, referring to the mobilisation of idle gold and foreign currency sources from the people. - Photo nld.com.vn Under the document, the Prime Minister required the governor to “continue focusing on doing research and implementing appropriate solutions to mobilise sources of foreign currency and gold among the people to serve development and investment.” At a meeting with the Prime Minister’s working group led by Government Office chairman Mai Tien Dung last month, the request to mobilise sources of foreign currency and gold was also stressed upon. At the meeting, Governor Le Minh Hung also expressed his views on the mobilisation of foreign currency and gold from the people by means of stimulating transformation in the past few years. The governor said overall macro-economic solutions of the past years were very successful, thanks to which foreign currency resources were transformed into Vietnamese dong. In 2016, the State Bank of Viet Nam (SBV) bought nearly $10 billion to increase its foreign exchange reserve, a large amount of which came from foreign currency held by the people, thereby turning into đồng. Part of the resource was brought directly by the people into production and business while…... [read more]

Firstly, the commission said, the pressure from the exchange rate is not too large, as the US dollar has devalued by more than 7% since early this year, and the chance to raise interest rates this year from the US Federal Reserves is less than 50%. Secondly, inflation is more likely to stay below the National Assembly’s target of 4%. Thirdly, the country successfully issued 75% of the Government bonds planned for the entire 2017, and the G-bond yield decreased by 0.2 percentage points to 0.3 percentage points compared with the end of June, and 1 percentage points compared with the same period in 2016. Hence, it would facilitate the reduction of interest rates in the banking sector. According to the commission, thanks to the positive movements in interest rates when the deposit interest rates are stable, lending has so far grown positively. Credit growth by the end of July 2017 was 9.3%, compared with the end of 2016. The lending structure by currency also continued to remain stable with loans in the đồng accounting for 91.7% of the total outstanding loans. Despite the rapid increase in lending, the liquidity of the banking system has been plentiful and inter-bank rates fell to the lowest level, since the beginning of the year.  As a result, the State Bank of Vietnam (SBV), in the first seven months of the year, withdrew VND48.6 trillion (US$2.13 billion) via the open market operations (OMO). According to…... [read more]

According to the National Financial Supervisory Commission, many supporting factors in both the domestic and international markets could help an interest rate cut until the year-end. According to the National Financial Supervisory Commission, many supporting factors in both the domestic and international markets could help an interest rate cut until the year-end.- Photo kinhtedothi.vn Firstly, the commission said, the pressure from the exchange rate is not too large, as the US dollar has devalued by more than 7 per cent since early this year, and the chance to raise interest rates this year from the US Federal Reserves is less than 50 per cent. Secondly, inflation is more likely to stay below the National Assembly’s target of 4 per cent. Thirdly, the country successfully issued 75 per cent of the Government bonds planned for the entire 2017, and the G-bond yield decreased by 0.2 percentage points to 0.3 percentage points compared with the end of June, and 1 percentage points compared with the same period in 2016. Hence, it would facilitate the reduction of interest rates in the banking sector. According to the commission, thanks to the positive movements in interest rates when the deposit interest rates are stable, lending has so far grown positively. Credit growth by the end of July 2017 was 9.3 per cent, compared with the end of 2016. The lending structure by currency also continued to remain stable…... [read more]

Indirect capital flowing out of Vietnam Hong Phuc By Hong Phuc - The Saigon Times Daily HCMC – Foreign investors are increasingly withdrawing their indirect investment capital out of Vietnam, with the sum divested from bonds in September alone amounting to US$5.1 million compared to US$7.5 million recorded in August. Foreign indirect investments are forecast to be withdrawn more in the coming time, said Glenn B.Maguire, chief economist for Asia Pacific at ANZ, at the conference on Vietnam’s economy held in HCMC on Wednesday by the bank. According to Glenn B.Maguire, US$17.4 million of foreign indirect investment was withdrawn from Vietnam on September 1-25, raising the total withdrawn amount to US$181.9 million in the past 18 weeks. Besides, share investment withdrawn totaled US$12.3 million in September compared to US$8.3 million in the previous month. “We forecast that foreign indirect investments will continue to be withdrawn in the coming months,” said Glenn B.Maguire. Hot capital flows are moving out of Asia as risks have been reevaluated globally. There will be certain adjustments happening to assets and especially attitudes and the appetite towards risks of investors are forecast to change in Asian countries where the import volumes are huge and the solvency levels are low, according to Glenn B.Maguire. Vietnam’s foreign exchange reserves, though increasing strongly lately, are rather modest. Therefore, it has to face the pressure of speculative trading and interest rates are easily impacted. However, the trade balance is improving. Factors for indirect investments to flow into Vietnam have turned…... [read more]

In early 2010, while the world economy was still in a fix to bounce back, the Vietnamese Party, National Assembly and Government worked out solutions to help the national economy recover from the global economic slowdown. Methods included tightening public expenditure, implementing a stimulus package, increasing exports, encouraging domestic consumption, and improving social welfare, which helped stabilize the country’s socio-economy. Over the past year, the prices of gold and foreign currency have seen fluctuations due to not only the world’s law of supply and demand but also speculation and rumours in the domestic market. To deal with the problems, the State bank of Vietnam (SBV) introduced effective policies to clean up the gold trading market by allowing gold import, reducing gold import taxes, adjusting exchange rates, and publicizing the national foreign exchange reserve. These policies helped reduce the gold price instability and stabilize the price of foreign currency. At the end of the year, while the Government is making every effort to curb inflation, many commercial banks joined a race to increase interest rates, creating a more complicated situation in the banking sector. In response to the banks’ decisions, the Government and SBV imposed administrative measures to control the race. The Ministry of Finance and Industry and the Ministry of Industry and Trade also took the initiative to control prices by deciding not to raise prices of coal, electricity, petrol and oil until the Lunar New Year Festival. Over 2010 many lessons were learned from the management of the socialist-oriented…... [read more]

High GDP growth rate According to the National General Statistics Office, Vietnam achieved GDP growth rate of 6.78 percent in 2010, surpassing the set target of 6.5 percent. GDP growth rate was 5.84 percent in the first quarter, 6.44 percent in the second quarter, 7.18 percent in the third quarter and 7.34 percent in the fourth quarter – the highest figure since the second quarter of 2008. The Ministry of Planning and Investment (MoPI) says that the high GDP growth is attributed to all sectors' good performance. The industry and construction sector ranked first with 7.7 percent, followed by services with 7.25 percent and the agriculture, forestry and seafood sector with 2.78 percent. The achievement was recorded in the World Bank (WB)’s report on Vietnam’s economy in December 2010 which said that in the context of the global economic downturn, Vietnam’s economy continued to achieve relatively high and stable growth. The WB’s report says that although economic recovery was not even in different parts of the world the Asian region obtained quite good result. Particularly in Asia, Vietnam continued to its impressive growth. Vietnam was one of the most rapidly growing economies in East Asia and Pacific region before the global economic crisis and kept the position post crisis. After obtaining a GDP growth of 5.3 percent in 2009, the country continued to growing at 6.5-6.7 percent in 2010. Journalist Kavi, former Chief Editor of Thai Nation Newspaper says that Vietnam is the key economy in the ASEAN bloc. With…... [read more]

Over the past few days, the closing speech delivered by Party General Secretary Nguyen Phu Trong at the conference has made the domestic headlines as it shows the Party’s strong determination to restructure the national economy alongside renewing the growth model. It could be considered a mandatory order to speed up economic reform to meet the practical requirements of national development. In his speech, Mr Trong analysed weaknesses of the national economy which have been warned by the economist and press circles. They include high inflation, high public debts, low foreign exchange reserves, risks of the unstable financial and real estate markets and sluggish business production. After pointing out the root causes for bottlenecks in growth, Mr Trong stressed that it is time to revamp the economy by firstly restructuring public investment, secondly restructuring the financial market, notably commercial banks and financial institutions, and thirdly restructuring State-own businesses, with a major focus on economic groups and State corporations. The fact is that public investment has increased sharply in recent years, making up a big proportion of the country’s GDP. However, investment efficiency has constantly been reduced with the Incremental Capital Output Ratio (ICOR) fluctuating abnormally. This means national resources have been wasted due to weaknesses in decision making, management and implementation. Inefficient investment has also reduced the competitiveness of the national economy in the eye of foreign businesses. There is growing concern over instability of the financial market, especially the operations of commercial banks which entered an unhealthy competition by…... [read more]

Reporter: Could your share your assessment of Vietnam’s economic performance so far this year? Mr: Sandeep Mahajan: Economic activity continues to firm up in Vietnam. GDP growth came in at 6 % in the first quarter of 2015, the fastest first quarter rate of growth in five years. This followed 6 % growth in 2014 – the fastest annual growth rate since 2011. Inflation has stabilized at low levels, with the consumer price index (CPI) rising by just 0.04 % in the first four months of 2015 (relative to the same period last year), reflecting a more prudent macroeconomic policy stance as well as a conducive external environment (low food and commodity prices, in particular) and slow credit transmission by the domestic banking sector. Exports have held up well (recent slowdown notwithstanding), while strong inflows of FDI and private remittances have been sustained, which has helped Vietnam strengthen its external balances and build up the foreign exchange reserves. At the same time, while Vietnam remains at a low risk of debt distress, rising public debt levels are becoming a concern. Vietnam’s total outstanding public and publicly-guaranteed debt was estimated at nearly 61 % of GDP by end-2014. The immediate root cause of the growing public debt is the budget deficit (financed largely through domestic sources). This underscores the need for a credible medium-term fiscal consolidation plan that would reverse the declining trend in revenue collection, stabilize recurrent spending at more affordable levels, and improve the efficiency of spending. Special attention…... [read more]

Under consideration are the amendments to the Law on the State Bank of Vietnam (SBV) and the Credit Organisation Law. On the amendments to the Law on the SBV, the deputies examined 15 issues including interest rates, jurisdiction to decide the nation’s monetary policy and policy on foreign exchange reserves, transparency and justification of the nation’s monetary policy, and state management of bank deposit insurance. The deputies agreed that the NA will decide the nation’s annual inflation targets and oversee implementation of the nation’s monetary policy. Speaking at the session, NA Vice Chairman Nguyen Duc Kien said the law, once enacted, will apply not just during the current global financial crisis but for an extended period. It is necessary, he added, to implement the resolutions of the 10th National Party Congress and the Party’s Political Bureau to build an independent Central Bank. The committee will also suggest modifications to the NA resolution on the nation’s critical projects.... [read more]




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