return icon Vietnamnet.vn

Business face obstacles as forex market heats up

The escalation of the US dollar reaching a record high of more than VND24,500 in recent times is anticipated to cause numerous challenges for Vietnamese firms due to the risk of exchange rate differences, according to insiders.

business face obstacles as forex market heats up picture 1

Experts point out that almost all domestic businesses will be forced to sacrifice part of their finances and will likely fail to ensure growth profits moving forward.

Accordingly, enterprises that import goods from overseas and sell them domestically, especially in the middle-end and high-end industries, are likely to meet numerous challenges due to rising prices. However, export businesses which earn turnover in US$ will benefit from the move.

Nguyen Quoc Anh, director of Duc Minh Rubber Co., Ltd., says that with regard to the plastic industry, 80% to 90% of the materials for production must be imported and paid in US$, and that the high exchange rate has placed significant pressure on shrinking profits.

Furthermore, Vietnamese enterprises which export to markets like Europe and the UK with their own currencies such as the EUR and GPB will also face hurdles as these currencies have also fallen sharply over the past four months as a result of the appreciation of the greenback.

Meanwhile, Do Phuoc Tong, chairman of the Ho Chi Minh City Electromechanical Association, points to the fact that the electromechanical industry mainly exports products to Europe, Japan, and the United States, but export businesses feel the pinch when the EU currency (EUR) and Japanese yen (JPY) depreciate against the greenback in these markets.

Theoretically, experts agree the appreciation of the dollar can only happen in the short term, because the United States itself will suffer when its currency is so strong.

Nguyen Van Sang, CEO of Viet Products Corp, admits that demand for wooden furniture in the global market is weakening amid export orders falling sharply.

Given the current context, economic expert Dinh The Hien advises Vietnamese exporters to focus on maintaining export orders and markets, and at the same time accept financial losses in the markets using the dollar in transaction over the next six months.

Vietnamese enterprises remain vulnerable to higher raw material and fuel costs compared to countries such as Thailand, Taiwan (China), the Republic of Korea, and Japan, particularly as the Southeast Asian nation is currently still producing low-end items at competitive prices, he says.

The economist suggests that Vietnamese enterprises should gradually enhance product quality, from production to customer care, whilst seeking to improve the price of products in the future.

Source: VOV

MORE NEWS

VIETNAM NEWS HEADLINES FEBRUARY 4/2023

Minister requests fruitful cooperation in defence industry with other countries

Vietnamese cyber users advised to be cautious about ChatGPT registration

ChatGPT has recently been so popular in various fields. Since there are limits in ChatGPT registration from Vietnam, Internet users here are warned to be careful to proceed with the process to avoid being scammed.

2-3 more submarine fiber cable routes needed for Vietnam

The Vietnam Internet Association’s (VIA) Secretary General Vu The Binh said Vietnam needs at least two or three more submarine fiber cable routes in the next five years to serve mounting demand.

Vietnam still approves use of Covid antibody treatment

Vietnam still approves use of Covid antibody treatment Evusheld as it is still effective against subvariants circulating in the Southeast Asian country.

Former Coast Guard generals accused of embezzling $2.1 million

The crime allegedly started in 2019 when the Vietnam Coast Guard’s Department of Technology was allocated VNĐ150 billion (US$6.3 million) to purchase equipment.

Transport Ministry told to disburse VND94 trillion in 2023

The Government has tasked the Ministry of Transport with disbursing nearly VND94.2 trillion of public investment in 2023, up 1.7-fold against the 2022 figure and 2.2-fold versus 2021.

Banks pumped VND800 trillion into real estate in 2022

As of December 31, 2022, the outstanding loans provided to the real estate sector had reached VND800 trillion, while the figure was VND700 trillion by the end of 2021, said the Ministry of Construction, citing SBV’s (State Bank of Vietnam) figures.

Finance Ministry suggests taxing land and buildings separately

The Ministry of Finance has proposed developing a new property tax law to separate the tax on land from that on buildings.

Vietnamese movies earn over VND350 billion during Tet

Vietnamese-made films tallied more than VND350 billion in ticket sales in the first nine days of the Lunar New Year, between January 22 and January 30, according to the independent analytical website Box Office Vietnam.

Nguyen Trong Hieu's music video in finals of German Eurovision Song Contest

In a landmark moment for Vietnamese music, Nguyen Trong Hieu, winner of Vietnam Idol 2015, has announced that his latest music video has made it to the final eight in the German Eurovision Song Contest (ESC).

Vietnam's tourism revenue reaches VND46 trillion in January

Vietnam’s tourism industry generated around VND46 trillion in revenue this January, with a surge in domestic and international tourist numbers, according to the Vietnam National Administration of Tourism.

Vietnamese consume nearly 60 tons of gold in 2022

Vietnamese consumers bought 59.1 tons of gold, representing a year-on-year increase of 37 percent, the fastest increase in Southeast Asia, according to the World Gold Council.

Vietnam remains in world’s Top 5 plywood exporters

Vietnam earned US$ 1.1 billion from exporting plywood in the first 11 months of 2022, securing the fifth place in the world’s top five largest plywood exporters, according to the International Trade Center (ITC).

Bui Thanh Nhon returns to Novaland as board chairman

Bui Thanh Nhon, founder of NovaGroup, has officially come back to the property developer Novaland as chairman and legal representative, according to a press release issued this afternoon, February 3.
back_to_top