Global uncertainties, such as the impacts of the Fed’s rate hikes and the spiralling US-China trade war, have triggered questions about whether the lending interest rate in Vietnamese dong will increase and in what direction foreign exchange rates will move. The Vietnam News Agency talks with economic expert Vu Dinh Anh about his forecasts for the developments of the financial markets in the remaining months of this year. Could you comment on the recent developments of the money market? The money market from the beginning of this year has seen stable developments. Major indicators such as money supply, deposit growth, credit growth, interest rates and foreign exchange rates have all seen stability in the period. The foreign exchange rate is one macroeconomic indicator which has drawn significant market attention recently, given the Fed’s rate hikes and the spiralling US-China trade war. The foreign exchange rate is largely relevant to the openness of the Vietnamese economy. … [Read more...] about Domestic market faces global uncertainties
When will money market rates increase
Vietnam’s e-commerce websites are still receiving heavy investment to develop despite big losses, but when will these projects stop losing? The Vietnamese e-commerce market is one of the leading markets in the region for investment. According to Nielsen, the annual growth speed of the e-commerce market is 22% and is expected to hit US$10 billion in annual revenue by 2022 from the current US$4 billion. The Vietnamese e-commerce market shows huge potential for development and receives great attention from new investors. In a recent report by Topica Founder Institute, e-commerce attracted US$83 million of foreign investment through 21 deals. Startup SEA (used to be Garena, which was termed as a unicorn in Asia), ranked first among investors pouring capital into Vietnamese startups in 2017. SEA spent US$64 million acquiring 82% of the shares in Foody, a food delivery website and app. CyberAgent Ventures, a Japanese venture investment fund, continues its activities in Vietnam. In … [Read more...] about When will Vietnam’s e-commerce players stop “burning money”?
Viet Nam News “Everyone, I will sell rose bouquets tomorrow in celebration of International Women’s Day. Those who are looking to give flowers to their girlfriends or classmates, please come to support me in front of Gate A of Hải Phòng University.” So wrote 26-year-old Trần Thị Hoa in one of her last Facebook posts on March 6. Early on the morning of March 7, Hoa and her friend Trần Thị Trang rode on motorbike to the flower market Đằng Hải in Hải An District in the northeastern port city of Hải Phòng. Not born to wealthy families, the pair intended to buy flowers and utilise their craft skills to make elaborate bouquets, aiming to make some money to cover their study and living expenses. On that fateful morning, Cao Huy Hoàng was driving a container truck for an export-import company along his usual route. Stopped at a red light, he saw that two trucks ahead of him were already occupying … [Read more...] about Road accidents: When will the pain end?
Lending interest rates have room to be reduced further due to the support of positive factors including the recent Government resolution that requires the State Bank of Vietnam (SBV) to strive for lowered interest rates. According to data from the National Financial Supervisory Commission, deposits from economic organisations and individuals have increased since January this year, which was up 0.5% compared to the end of 2017. Meanwhile, the average deposit interest rates in Vietnamese dong for over 12-month terms hovered around 6.55% per year in the first two months of this year, up 0.03 percentage point compared to the end of 2017. Several joint stock commercial banks pushed their long-term interest rates higher, including Viet Capital Bank, with the long term interest rates listed at 8.3% per year for 13-month term deposits, up 0.3% compared to the end of 2017 and 8.5% per year for 15-month term deposits. The slight increase in long-term deposit rates in the first months of this … [Read more...] about Interest rates expected to be lowered
Specific Policies For Specific MarketBy Quang MinhIn developed countries, few people hold on to gold due to its low liquidity and complicated transaction procedures, and only professional investors make transactions in large quantity. In Vietnam, on the other hand, in line with the current legislation, gold trading is quite favorable, except for material gold import and export and gold bar production, which are strictly controlled by the State Bank. Jewelry gold trading and fashioning are conditional business, but they do not require a certificate. A registration at a local Department of Planning and Investment is enough for organizations and individuals to conduct this business.While the world gold market is developing professionally, with new forms such as physical gold trading, exchange-traded funds (ETFs), investments through accounts, gold derivatives or stocks of gold mining companies, gold trading in Vietnam just began in 2008. Transactions in the local market are mostly buying … [Read more...] about Specific Policies For Specific Market
Agribank, Vietcombank, Vietinbank, BIDV and VPBank will reduce lending interest rates by 0.5 per cent a year for prioritised economic sectors, such as small and medium domestic businesses. Financial expert Nguyen Tri Hieu answered Viet Nam News questions on the matter.What is your take on this incentives application?I think this prioritised lending-rates reduction is a positive action to encourage development by commercial banks following the Prime Minister’s and the State Bank of Vietnam’s instructions to support enterprises in accessing capital at the most reasonable cost to promote economic growth.I applaud their effort in helping businesses grow for the year ahead, which is a common determination across the banking sector, starting with the SBV’s 2018 socio-economic development plan. The 0.5 per cent reduction may seem small, but it will have significant impact on small-and-medium-sized enterprises (SMEs) whose chief capital flow comes from commercial banks, so … [Read more...] about Silver lining to interest-rates blues
The State Bank of Vietnam (SBV) is aware of rising flout of the capped deposit interest rate and more drastic measures will be applied in the first quarter of 2012. The governor of SBV Nguyen Van Binh emphasised the necessity to change banks' capital structure to heighten liquidity The governor of SBV Nguyen Van Binh held a press conference on January 11, in which he said that the deposit interest rate cap will continue to be applied through June of this year. Recently, several banks have violated the regulation on deposit interest rate ceiling, with rates going as high as 16%-18%. Some banks even offered 20%. How will the SBV deal with the situation? SBV has been fully aware of the situation and kept track of these violations. In the first quarter of this year, we plan to take measures to tackle the problem. Our aim is to stabilise the financial market. Going from there, we will move to heighten the liquidity of banks, focusing especially on lending for the production … [Read more...] about Central bank intensifies efforts to stabilise interest rates
Market seen moving flat this weekPhuong Thao By Phuong Thao - The Saigon Times Daily HCMC – The local stock market may repeat sideways movements this week as the interest rate cuts announced last week were already priced in and failed to buoy investor sentiment. Viet Dragon Securities Company said the HCMC and Hanoi stock exchanges actually got no macroeconomic news last week. News of the establishment of the Vietnam asset management company and of the VND30-trillion subsidy package for social and affordable home buyers was just enough to push the two stock indexes up in the first session while the remaining days saw little volatility. The VN-Index in HCMC ended the week up 2.3% to 486.1 while the HNX-Index in Hanoi also gained 2.4% week-on-week to 60.48. Liquidity skyrocketed on both exchanges with the matching volume averaging out at 84.6 million shares worth VND943 billion a day, up 76% and 70% against the previous week respectively. The put-through market drew attention with … [Read more...] about Market seen moving flat this week
NDO - The State Bank of Vietnam has recently decided to lower the interest rates on short-term loans to priority sectors by 0.5 percentage points and some policy rates by 0.25 percentage points. This move is beneficial to the business community but there is still much to be discussed over this decision. In an interview, Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council, offered his insights into the central bank’s move. Q: Why did the State Bank decide to refrain from cutting deposit rates? A: I think the State Bank has a good reason for not adjusting deposit rates because if cuts are made, money will flow to other channels, possibly gold, stocks or property. This move would be very risky and cause difficulty for banks to mobilise funds especially when the amount of deposits was not very high in the first six months of the year. Q: Why did the State Bank opt for a reduction in interest rates on loans to five priority sectors at just 0.5 … [Read more...] about Why State Bank of Vietnam has kept deposit rates unchanged Most Recent News
WASHINGTON: The US central bank on Wednesday (Dec 13) raised the benchmark interest rate for the third and final time this year, and officials indicated they are not likely to be more aggressive next year, at least for now.Citing the strong labour market and solid economy, the Fed's policy-setting Federal Open Market Committee increased the key lending rate to 1.25-1.5 per cent, an increase of a quarter point on the cost of loans for everything from houses to cars.The quarterly forecasts by Fed officials showed no change in the expectations for policy moves in 2018 and 2019, with three rate hikes expected next year and one in the following year, identical to their September projections, indicating they are no more concerned about rising prices.Fed Chair Janet Yellen said the decision was prompted by the continued strong labor market, even while officials expect job gains to slow somewhat."Allowing the labor market to overheat would raise the risk that monetary policy would need to … [Read more...] about Fed raises interest rates, keeps policy outlook unchanged for 2018