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Banking and Finance News
State Bank of Vietnam denies change of exchange rate policy
The Director of the Monetary Policy Department at the State Bank of Vietnam, Pham Chi Quang, has denied rumours that the State Bank is considering changing tact in terms of monetary policy.
With Forex reserves being spent hand over fist trying to keep the dong from devaluing, there has been speculation that greater intervention may be needed, specifically an interest rate hike.
This denial from Pham, however, would suggest the bank intends to burn through its US dollar reserves a while longer.
See also: The Dong’s Wild Ride: Unpacked
State Bank open market operations as of COB May 30
The State Bank of Vietnam has continued to issue treasury bills to suck up excess liquidity in the economy. There are currently US$2.36 billion worth of T-bills outstanding as of the close of business on May 23. Also of note, the State Bank has outstanding loans to local banks to the tune of US3.2 billion.
Outstanding loans
| Issued | Length | Maturing | VND | US$ | % p.a. |
| 23-May | 14 | 6-Jun | 43,064 | $1,691,593,420 | 4.50 |
| 24-May | 14 | 7-Jun | 27,019 | $1,061,339,921 | 4.50 |
| 27-May | 14 | 10-Jun | 6,557 | $257,573,506 | 4.50 |
| 28-May | 14 | 11-Jun | 2,017 | $79,241,965 | 4.50 |
| 29-May | 14 | 12-Jun | 3,110 | $122,149,998 | 4.50 |
| Total | 81,767 | $3,211,898,810 |
*billions
Outstanding T-bills
| Issued | Length | Maturing | VND | US$ | % p.a. |
| 03/05 | 28 | 31-May | 4,600 | $180,693,520 | 3.50 |
| 06/05 | 28 | 3-Jun | 11,990 | $470,981,588 | 3.75 |
| 07/05 | 28 | 4-Jun | 7,200 | $282,824,640 | 3.75 |
| 08/05 | 28 | 5-Jun | 5,500 | $216,046,600 | 3.75 |
| 08/05 | 28 | 5-Jun | 5,550 | $218,010,660 | 3.75 |
| 09/05 | 28 | 6-Jun | 3,700 | $145,340,440 | 3.75 |
| 10-May | 28 | 7-Jun | 3,700 | $145,340,440 | 3.75 |
| 13-May | 28 | 10-Jun | 1,500 | $58,921,800 | 3.75 |
| 14-May | 28 | 11-Jun | 550 | $21,604,660 | 3.75 |
| 15-May | 28 | 12-Jun | 200 | $7,856,240 | 3.75 |
| 16-May | 28 | 13-Jun | 650 | $25,532,780 | 3.75 |
| 17-May | 28 | 14-Jun | 3,100 | $121,771,720 | 3.75 |
| 20-May | 28 | 17-Jun | 800 | $31,424,960 | 3.85 |
| 21-May | 28 | 18-Jun | 500 | $19,640,600 | 3.90 |
| 22-May | 28 | 19-Jun | 650 | $25,532,780 | 4.00 |
| 23-May | 28 | 20-Jun | 750 | $29,460,900 | 4.20 |
| 27-May | 28 | 24-Jun | 200 | $7,856,240 | 4.20 |
| 29-May | 28 | 26-Jun | 5,150 | $202,298,180 | 4.25 |
| 30-May | 28 | 27-Jun | 4,900 | $192,477,880 | 4.25 |
| 28-May | 35 | 2-Jul | 3,700 | $145,340,440 | 4.20 |
| Total | 64,890 | 2,548,957,068 |
*billions
Car news
How Vietnam feels about imported Chinese cars: insights from local media
Imported electric vehicles from China are struggling to sell in Vietnam because “Vietnamese consumers don’t favour Chinese products”, according to an article in VietnamNet.
They are not big fans of traditional vehicles from China either.
“The internal combustion engines of Chinese manufacturers are unreliable, lack durability, and consume too much fuel, they believe,” the publication says.
Furthermore, problems for China’s EV makers in overseas markets are causing concern among Vietnamese consumers.
“…Recent information about quality problems of BYD’s EV exports to Europe, when they could not get customs clearance, are causing potential Vietnamese buyers of low-cost Chinese cars to rethink their decision.”
Of note, it’s not clear how the author of this article drew these conclusions with no sources listed. These observations, however, could just as easily be applied to consumers in developed markets of Vietnamese electric vehicles–see: Vietnam’s Vinfast runs into more trouble in the US over unpaid rent.
Electricity news
Vietnam sets price bracket for LNG power negotiations
The Ministry of Industry and Trade–the MoIT–has set a maximum price the state power provider Electricity Vietnam–or EVN–can pay for power generated by LNG power plants at VND 2,590.85 per kilowatt. There is no minimum price.
Of note, the LNG price bracket is much higher than that of renewables. For wind power projects it’s between US 8.5 cents and US 9.8 cents per kilowatt-hour if they were online before November 1, 2021. If they went online after that, the bracket comes down to between US 6.42 cents and 7.34 cents per kilowatt hour.
See also: Electricity in Vietnam: Foreign Investor Cheat Sheet 2024
Gold news
Vietnam gold auction alternative unveiled, SBV to supply gold through banks
The State Bank of Vietnam has said it will sell gold from its reserves directly to four majority state-owned banks from June 3. These banks will then sell gold directly to consumers with the theory that this will help to bring the local gold price down to be more in line with the world gold price.
This decision came about after a series of gold auctions, in which 47,000 taels of gold were sold to an assortment of banks and gold retailers but failed to impact the local gold price to the extent the SBV had hoped.
“This shows that, in addition to market factors such as supply-demand relationships, the possibility of illegal acts, manipulation, price manipulation, and destabilisation of the gold market cannot be ruled out,” Deputy Governor of the State Bank of Vietnam, Pham Quang Dung, told the local press.
The Deputy Governor did not say how much gold would be sold or over what time frame or for how much.
See also: The Gold Price in Vietnam: Explained 2024
Investment news
Vietnam’s new FDI pledges almost US$1.8 billion in April
Vietnam added another 261 foreign direct invested projects to its 2024 tally in May, along with almost US$1.8 billion in additional capital commitments, according to data from Vietnam’s Ministry of Planning and Investment→see the data.
Labour news
Intel executive laments poor labour productivity in Vietnam
Mai Thien An, head of Intel Products Vietnam’s production department, told a forum on Sunday that employees often arrive at work on time but then have breakfast or take a break before they actually start working. He also said workers have been caught stealing, not following processes, and disregarding safety regulations, according to VN Express.
Labour productivity is a recurring theme in Vietnam with the country trailing in Southeast Asia. In 2021, it was fourth to last among ASEAN member states (excluding Brunei), ahead of only Myanmar, Cambodia, and Lao. According to the Asian Productivity Organisation, Vietnamese workers were productive to the tune of US$20,540 a year. For comparison, Indonesia and the Philippines, hit US$26,350 and US$23,600, respectively, on the same metric.
With this in mind, firms looking to enter the Vietnam market should keep in mind that there is a trade-off in labour productivity versus the low-cost.
See also: Average Salary in Vietnam 2024: Quick Guide
Manufacturing news
Vietnam’sIndustrial Productions Index jumps 8.9 points in May
Vietnam’s Industrial Production Index recorded a jump of 8.9 points in May of 2024 over May 2023. By the same metric: services related to printing, mining other metal ores that do not contain iron, and production of batteries and accumulators have recorded the biggest increases. Conversely, natural gas exploitation, exploitation of crude oil and natural gas, and crude oil exploitation saw the biggest falls→see the data.
See also: How to Open a Factory in Vietnam: Ultimate Guide 2024
Stock market news
Foreign traders continue to withdraw from the HoSE
Foreign traders have continued to sell down their positions in the Ho Chi Minh City Stock Exchange. In total, just shy of US$245 million was withdrawn from the market over the last five trading sessions. This brings the total net-withdrawn from the market by foreign traders to US$1.34 billion so far this year.
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VND* | US$ | VND* | US$ | VND* | US$ |
| 24/5 | 1,751 | $68,781,381 | 3,285 | $129,038,742 | -1,534 | -$60,257,361 |
| 27/5 | 1,219 | $47,883,783 | 1,751 | $68,781,381 | -532 | -$20,897,598 |
| 28/5 | 1,193 | $46,862,472 | 2,343 | $92,035,852 | -1,150 | -$45,173,380 |
| 29/5 | 1,856 | $72,905,907 | 3,513 | $137,994,856 | -1,657 | -$65,088,948 |
| 30/5 | 1,518 | $59,628,862 | 2,869 | $112,697,763 | -1,351 | -$53,068,901 |
| Total | 7,537 | $296,062,404 | 13,761 | $540,548,593 | -6,224 | -$244,486,189 |
Source: www.hsx.vn
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Trade news
Vietnam-US Two Way Trade Reached US$8.98 billion in April
In April, Vietnam exported US$8,978,777,880 worth of goods to the United States. Conversely, it imported US$1,119,319,631 from the US giving Vietnam a trade surplus with the country of US$7,859,458,249→see the data.
See also: How to Start an Import Business in Vietnam: Ultimate Guide 2024
The week ahead
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