Interest rate’s decline supported from various factors

Liu Ying, a professor of the PUC’s Chongyang Institute for Financial Studies, said the development of economic and trade ties between ASEAN and China will be significant to economic growth of each side in the years to come. Trade between ASEAN and China is significant to economic growth of both sides. Photo:  To bring into full play their cooperation potential, Liu Ying called on ASEAN and China to intensify their connectivity in policies, infrastructure and transport as well as cyber connectivity, along with enhancing political trust. The professor highlighted the quick formation of cross-border economic cooperation areas between China and ASEAN’s neighboring countries like Vietnam, Laos and Cambodia, saying such zones have helped with the process of industrialization, urbanization and informationalization in these countries. Liu Ying said both ASEAN and China should double efforts to improve their investment environment and propose more measures and policies to attract investors from the other side. At the same time, it is necessary for them to increase the flows of direct capital and boost infrastructure construction in the financial sector, Liu Ying said, urging China to provide more support for the ten-member group in the capital market and financial connectivity. In the context that the US Federal Reserve Bank raises its interest rates and tightens its monetary policies, and that President Donald Trump backs trade protectionism, enhancing financial collaboration between ASEAN and China will help prevent external risks and financial crises, and stabilize…... [read more]

LONDON: European stock markets struggled on Thursday (Jul 27) while Wall Street marched relentlessly forward, boosted by strong earnings from US giant Facebook. Logo of the London Stock Exchange The London market buckled on sorely disappointing news from British pharmaceuticals giant AstraZeneca. The world's bourses meanwhile took in their stride an "uneventful" monetary policy announcement from the US Federal Reserve, dealers said. AstraZeneca's share price plunged 16 per cent as investors fretted over disappointing trial results for its next-generation lung cancer treatment. Sentiment took another heavy blow as Astra's first-half sales were hurt by the loss of US patent protection on two blockbuster drugs. This despite the announcement also of a multi billion-dollar deal between Astra and US peer Merck to advance cancer drugs.   Also in London, shares in British bank Lloyds slid on falling net profits, in its first results since the bailed-out lender returned fully to the private sector. On the upside, stock in Diageo - the British maker of alcoholic drinks like Guinness stout - rallied strongly as it unveiled a £1.5-billion (US$2.0-billion) share buyback. Rising commodity prices meanwhile inspired a raft of gains across London's mining sector, partly offsetting weakness elsewhere. Anglo American jumped higher as the resources giant resumed shareholder dividends after rebounding into bumper net profits in the first half of 2017. "The gains in the consumer goods, oil…... [read more]

Boosting exports, reducing import surplus In the first quarter of this year, Vietnam’s exports generated US$8.57 billion, a year-on-year increase of 20 percent. Notably, exports in January and March fetched more than US$3 billion each. This means despite legal complications, exports have maintained high growth, and the export target of earning US$36 billion in 2006 is likely to be achieved. Meanwhile, Vietnam imported US$8.513 billion worth of goods in the reviewed period, creating an export surplus of more than US$50 million. That was good news for the national economy as since 1993 Vietnam has posted increasing import surplus, totalling US$5 billion in the past three years. The export surplus in the first quarter of 2006 was attributed to measures to boost exports alongside control of imports, particularly in the State business sector. Statistics show that the State business sector generated an import surplus of US$870 million in the first quarter of 2003, US$1.6 billion in the corresponding period of 2004 and US$2.36 billion in the same period of 2005. However, this figure fell to US$1.75 billion in the first quarter of 2006. Market forces also played a very important role in import surplus fall. In the first three months of 2006, the import of complete knocked-down (CKD) motorcycle and car units, fertilisers, steel and steel ingots, and petrol dropped dramatically. The import of CKD motorcycles and cars and their accessories alone fell by 50 percent. This means that the domestic market is playing the greater role in regulating quantity and…... [read more]

Hanoi (VNA) – The Vietnamese economy needs to take caution against external shocks this year due to the global economic uncertainties, a scholar has warned. Director of the Vietnam Institute for Economic and Policy Research under the Vietnam National University’s University of Economics and Business Nguyen Duc Thanh made the comment during a ceremony in Hanoi on January 16 to release the macroeconomic report for the fourth quarter of 2016. The report warned of the possibility of the US Federal Reserve’s interest rate hike three times this year, which could push up the USD rate in Vietnam, thereby hurting Vietnam’s exports and deteriorating trade deficit. In order to maintain the value of Vietnamese dong in the context of rising USD rate, the State Bank of Vietnam could increase deposit rates but this could pose risks and cause a ripple effect to the real estate sector, it said. Another concern is that major oil producers’ production cut since January 2017 could raise oil prices again. On the plus side, it could add more revenues to the State budget but also potentially put pressure on domestic inflation which has been higher recently due to the adjustment of public service prices. Thanh said the 6.7 percent growth target this year is high and an under-4 percent inflation is not easy to achieve, suggesting that achieving growth target be done with “patience over haste” policy in order to prevent a relaxation in stabilising the macro-economy. The report also forecast that the economy could expand…... [read more]

Director general of the Vietnam Export-Import joint-stock Bank Nguyen Gia Dinh said banks raised interest rates in 2005 but the value of VND interest rate remained low compared to that of the US dollar. Therefore depositing in VND or USD depends on the decision of saving account holders. If depositing in USD, saving account holders need to consider two objectives: interest rate and exchange rate. To avoid risks, depositors may choose interest rate. Meanwhile if they want to turn a profit through exchange differences, they must consider both objectives. If GDP increases and Consumer Price Index (CPI) climbs higher than GDP, saving in VND will be worthless. In 2006, if GDP rose on a par with CPI, citizens would not deposit in VND. If they deposited in USD they could make a profit from the high interest rate of USD estimated at around 4 percent a year. According to Nguyen Phuoc Thanh, deputy director general of the Vietnam Foreign Trade Bank, in mid December, the US Federation Reserve System (FED) raised the interest rate of USD by 0.25 percent to 4.25 percent. Therefore, the domestic banks will have to adjust the interest rate of USD as well as that of VND. Next year, it is estimated that FED will continue to raise the USD interest rate to 5 percent. The exchange rate between the Vietnamese dong and the US dollar will have no great impact as it depends on the national economy and the strength of the Vietnamese dong. This…... [read more]

The Voice of America (VOA) quoted PM Dung as saying after talks with President Bush at the White House that the US and Vietnam are building a constructive and friendly partnership on the basis of mutual benefit The two leaders discussed issues relating to expansion of bilateral trade, investment as well as cooperation in other areas. The Radio France International (RFI) reported that since the bilateral trade agreement came into effect in December 2001, US-Vietnam trade significantly increased to US$12 billion in 2007, with the balance in favour of Vietnam. The US is Vietnam’s largest export market while Vietnam has become a magnet for American businesses and goods. A mission of 23 American leading groups in finance, energy, aviation, information technology, which visited Vietnam last May to seek investment and business opportunities was evidence of their strong investment interest. The BBC said PM Dung focused on economic-related issues on his first day in the US. The Vietnamese PM met with the Secretary of Wisconsin Department of Administration, former foreign minister Madeleine Albright, and attended a meeting with the Vietnam-US Consulting Council for Strengthening Competitive Capacity. PM Dung also met with former US Federal Reserve Chairman Alan Greenspan and the Secretary of Finance Henry Paulson. During the meetings, PM Dung spoke about Vietnam’s current economic situation and expressed hope to learn experience in solving economic development issues, macro economic management and inflation control from other countries, including the US. US and foreign agencies cited PM Dung’s statement at a ceremony for…... [read more]

Under the decision, credit organisations will apply business interest rates including capital mobilisation and loan interest rates in Vietnamese Dong (VND) based on business interest rates not exceeding 150 percent of the basic interest rate regulated by the SBV for each period. The application of the basic interest rate serves as a tool to manage the money policy and as a foundation for credit organisations to fix business interest rates and adjust interest rates of the inter-bank domestic monetary market. This also shows that market interest rates help to create a reasonable level for capital mobilisation and loan interest rates that harmonises the interests of depositors, credit organisations and loan borrowers. General Secretary of the Vietnam Banks’ Association (VNBA) Duong Thu Huong said that at a meeting on the same day between the SBV Governor and commercial banks’ general directors, they favoured a project to change the SBV’s mechanisms for interest rate adjustment as it will help banks adjust their interest rates in line with the market in the same way as the US Federal Reserve has done.... [read more]

By 9am, 24-K gold at Bao Tin Minh Chau Gold, Silver and Gem Stone Company in Hanoi traded at VND18.6-18.75 million per tael with the buying and selling prices decreasing by VND100,000 per tael compared with transactions on the previous day.Domestic gold prices fell due to a decline in the world’s gold prices. The gold price in New York was fixed at US$905.4/ounce on July 30 after it had dropped to US$894.5/ounce, the lowest level over the past one month.Judging from some positive signs of the American economy, many people hoped that the price of oil would also decrease.The US Federal Reserve System FED announced on July 30 several steps to enhance the effectiveness of its existing liquidity facilities, including the introduction of longer terms to maturity in its Term Auction Facility loans. In association with this change, the European Central Bank ECB and the Swiss National Bank are adapting the maturity of their operations.Besides, USD is supported to increase its price and is standing at the highest level compared with EURO price after one month. In particular, a recent report from the US government showed that the US economy in the second quarter of this year had reached the highest growth rate since September 2007.... [read more]

“Though the country is likely to witness some problematic issues in the short-term, foreign investors upon evaluating the country’s potential, still have positive expectations about Vietnam’s growth in the mid and long-term,” said Hoa. She said that over the past 15 years Vietnam has made progress in promoting trade liberalisation and attracting foreign direct investment (FDI). The Government estimates that total national investment in 2008 will reach US$34.8 billion, with State budget capital at US$5 billion, accounting for 14.5 percent. Ms Hoa said FDI had hit a record high, and was a “shining spotlight on the economy’s outlook”. She noted that FDI had shifted from the services to the industrial sector thanks to two “super projects” with a total investment of US$14.1 billion- the US$7.9 billion Huong Nghiep Formusa Steel Project; and the US$6.2 billion Nghi Son Oil Refinery. Mrs Hoa said inflows of official development assistance (ODA) will play an important role in infrastructure development and environmental protection. Total registered ODA in 2008 was US$3.1 billion, of which US$2.5 billion was official loans and US$529 million came as non-refundable aid. She said the Government would take the leading role in guiding the macro-economic system through a fluctuating period, particularly prone to external shocks. “Investment funds and international investors play an important role in the bid for successful international economic integration in an extensive range of sectors, including trade, tourism and investment attraction, investment attraction.” Alain Cany, chairman of the European Chamber of Commerce, told the conference that the pressure…... [read more]

By 11am today, gold prices in the Vietnamese market saw an increase of VND260,000 per tael against yesterday. SJC gold is being bought by the Saigon Gold, Silver, and Gemstone Company at VND20.3 million per tael and sold for VND20.4 million. Gold of the same kind from the company PNJ is being purchased at VND20.27 million and sold for VND20.35 million per tael. The highest buying and selling prices were recorded at banks such as Eximbank and ACB (buying at VND20.32 million and selling at VND20.42 million per tael.) On the SBJ gold trading floor, gold prices hit a record level of VND20.2 million per tael. The floor also saw an enormous amount of gold traded – nearly 226,000 taels. World gold prices have climbed considerably due to optimistic information about the demand for US dollars, whose value has decreased as a result of the US Federal Reserve’s gloomy forecast about its country’s economic growth. The US$/VND rate announced by the State Bank of Vietnam this morning stood at 16,935, a decline of VND2 from yesterday. In Vietcombank and Eximbank, the US dollar was bought and sold at the same price of VND17,782 per US dollar.... [read more]

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