Vietnam Banking News

Advertisements

Random Post

• Intel recruiters set sights on the best and brightest
• Vietnam ranked 54 in maths in the world
• Chengdu-Ho Chi Minh City flight route to open soon
• Imported Vegetables and Fruits Flooding Vietnam Market
• PetroVietnam H1 Crude Oil Output Estimated at 7.2MT
• BMI raises VNs GDP growth forecast to 6 percent

Vietnam Banking News

Vietnam Business » Vietnam Banking News » Businesses struggle as dollar gets more expensive

Businesses struggle as dollar gets more expensive

On August 17, the State Bank of Vietnam (SBV) increased the average inter-bank exchange rate by VND 388 to VND 18,932 per US dollar in an effort to ease the trade deficit. The new exchange rate is applicable as of August 18, and the trading band remains unchanged at ±3%. The SBV also stipulated that the ceiling exchange rate listed by commercial banks is VND19,500.

Following the State Bank of Vietnams decision to devalue the dong against the US dollar by two percent, many companies in Ho Chi Minh City have complained they cannot keep their selling prices unchanged and maintain profits.

Several manufacturers, retailers, and distributors told Sai Gon Giai Phong on Thursday, August 19, that the new exchange rate made it difficult to maintain the prices of many commodities, especially of items produced with imported materials whose prices depend on the USD-VND exchange rate.

Some importers, including those of kitchen utensils, are preparing to increase their selling prices to offset the rise in input costs, said Bui Hanh Thu, deputy director of the Saigon Co.op.

One representative of a supermarket chain said: "In early August, many suppliers of garments, food and cosmetics said they would increase prices of a number of commodities by 3-12 percent. While we were negotiating ways to maintain prices, the inter-bank rate increased, making it more difficult for us to keep prices unchanged.

"From September, we cannot help but raise the selling prices of a number of commodities at a rate that reconciles the benefit of producers, traders and consumers."

Currently, most supermarkets, including Co.op Mart, Big C, Satramart, Maximart and Citimart, can offer goods at the same prices as before, owing to large reserves. Meanwhile, many traditional markets and shops that trade in imported goods have increased their selling prices.

The rise of the interbank rate had an immediate effect on traders who hold small quantities of goods in stock, said a trader of imported confectionary in Binh Thanh District said. "For the time being, I try to keep prices unchanged but have to reduce the discount rates to maintain profit".

Cao Tien Vi, chairman of the Saigon Paper JSC, said the increased inter-bank rate would directly affect the companys business, as increased prices of many imported materials "would make our production costs rise".

The companys investment plan has been also affected. "We are investing in a new production line worth VND100 billion. Now with the new inter-bank rate, we will suffer an increase of about 2.1 percent in our investment costs," Vi said.

To maintain its competitiveness, the company is trying to not to increase selling prices, but if the situation continues, the companys profits will come down to zero, he said.

Tran Quoc Manh, Vice President of HCM Citys Association for Fine Arts and Wood Processing, said: "The country targets US$3 billion worth of woodwork exports this year, but with the increased inter-bank rate, the target becomes distant since as much as 80 percent of the materials for the wood processing industry are imported".

Many long-term export contracts have been signed with foreign partners, so local importers could face a lot difficulties with a rise in their input costs that will eat away their profit, Manh cautioned.

Vietnam Business And Financial News Network. Source [english.vietnamnet.vn]

More Vietnam Banking News:

• Local Bank Sets Up Financial Consultancy JV in Laos
• Vietcombank to sell stake in Eximbank
• 23 banks submit plan for the recapitalization of Chartered
• Tien Phong Bank to collect the taxes for the state budget
• Regulate the handling of dangerous debt to the Vietnam Bank for Social Policy
• State Bank denies that Vietnam is short of foreign exchange
• Banks rush to change names
• Vietcombank posts $146mil in profit
• Capital abundant at some banks and deficient at other banks
• Banks rush to open savings funds

Popular Vietnam Business News

Tasco plans to raise chartered capital to 135 billion dong

In details, the company will issue 5.5 million shares for existing shareholders with par value of 10,000 dong per share, under the ratio of 1:1 or one old share for

Vinashin Affiliate Launches First Car-carrying Ship

. Ha Long Shipbuilding Company, an affiliate of Vietnam Shipbuilding Industry Group (Vinashin), launched a 70,000 DWT car-carrying vessel on Tuesday, July 21 in the northern province of Quang Ninh.

Tolls proposed on cars using downtown streets

The citys Tien Phong Technology Joint Stock Company has proposed starting toll collection on cars using downtown streets from January 2012 with a fee level from US$1 to US$2, or

Vietnam hub recalls milk with content deficiencies

Health inspectors in Ho Chi Minh City on Wednesday ordered the recall of five milk products that did not contain the quantity of protein announced on their labels, and suspended

Leap in exports pushes trade deficit to $5.4b in five months

The countrys trade deficit reaches US$5.4 billion in the first five months of the year, according to experts from the General Statistics Office (GSO). The trade deficit was equivalent to

World Bank Predicts US$2.6B Surplus in Vietnam Balance of Payments in 2010

An excess of US$11.7 billion in the capital account will help Vietnam cover a shortfall of US$9.1 billion in the current account this year, the Hanoi-based Chief Economist Martin Rama

HCM City holds global marketing expo

The countrys first-ever International Advertising Equipment and Technology Exhibition opened August 5 in HCM City. The three-day event, Vietad 2010, has attracted more than 150 booths and nearly 70 domestic

Businesses weary of revised automatic import license procedure

Long Quoc Trung, Director of Matsu Electronics, a distributor of refrigeration equipment from Malaysia, said he is nervous because after two weeks, he still has not got confirmation of his

Advertisement