Vietnam Dong may weaken in 2012: Standard Chartered reports

Vietnam dong is likely to depreciate slightly in 2012 as local demand for dollars rises when firms’ dollar-denominated loans mature at end-2011, the local online newspaper Vietnam Economic Forum quoted a report of Standard Chartered Bank.

The State Bank of Vietnam may not be able to stabilize the local USD/VND exchange rate if it cannot narrow trade deficits, increase reserves and reduce inflation, said Tai Hui, Regional Head of Research, South-East Asia.

Standard Chartered Bank lowered Vietnam’s economic growth rates to 5.8% from 6.5% in 2011 and to 6.3% from 7% in 2012.

The bank downgraded Vietnam Government Bonds from “Overweight” to “Neutral”. It forecasted the local government to issue VND50-80 trillion worth of bonds, depending on the market movements.

The report also forecasted the VND lending rates in the interbank and government bond markets to increase at the year end.

Source Sophie/ News Writer/ StoxPlus

Tags: Vietnam banking industry, vietnam dong, Vietnam finance, Vietnam financial

Posted by VBN on Oct 12 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry