Vietnam BOP surplus forecast at $5bln

Vietnam is estimated to have a surplus of $5 billion in balance of payment (BoP) in the first seven months of 2011, enabling the central bank to stabilize the exchange rate and to keep USD interest rates stable until year end.

Vietnam is estimated to have a surplus of $5 billion in balance of payment (BoP) in the first seven months of 2011, enabling the central bank to stabilize the exchange rate and to keep USD interest rates stable until year end, the State Bank of Vietnam said in a report released Wednesday.

The country run a BoP deficit in Q1/2011 but it changed to be surplus in Q2/2011 and Q3/2011 to make up the sum, the SBV gave more details.

The country’s current and capital accounts were improved as banks withdrew their deposits in foreign currencies and mobilized funds abroad to meet the demand for foreign currency credits in the local market.

The SBV estimated the country’s current account surplus to stand at $1.3 billion in 7M/2011, as compared to a deficit of $3.2 billion a year earlier. The sum of income receipts and overseas in-bound remittance amounted to $5.6 billion, up 42.7% a year earlier.

Vietnam also ran a capital account surplus of $9.8 billion in 7M/2011, doubling that in the same period last year. The foreign indirect investment reached $700 million and is expected to arrive at $1 trillion in 9M/2011.

The SBV reiterated that it would keep the exchange rate steady within 1% band and stabilize the USD interest rates until end 2011 as the BOP enjoy surplus while forex reserves and liquidity of the banking system are strengthened.

Source Sophie/ News Writer/ StoxPlus

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial