return icon Vietnamnet.vn

Importers, exporters impacted by exchange rate volatility

The recent fluctuations in the US dollar and Japanese yen have both positive and negative impacts on Vietnamese traders, according to experts of the Ministry of Industry and Trade (MoIT).
A number of Vietnamese fresh lychee are sold at AEON supermarket in Japan. The recent fluctuations in the US dollar and Japanese yen may affect domestic exporters. 

The recent fluctuations in the US dollar and Japanese yen have both positive and negative impacts on Vietnamese traders, according to experts of the Ministry of Industry and Trade (MoIT).

The Vietnamese dong has strengthened by 12 per cent against the Japanese yen this year while it has weakened 2.6 per cent against the US dollar.

Officials said the US Federal Reserve (Fed) has tightened monetary policy to curb inflation in the US. Prices in the US have been rising at their fastest rate in almost 40 years while the Bank of Japan (BOJ) has continued with monetary easing to support the economy's recovery from the pandemic.

According to experts, the depreciation of the Japanese yen has partially benefited some businesses with loans to pay in Japanese yen and Vietnamese importers.

Many Japanese food and household items are favoured by Vietnamese consumers. The weaker yen has caused the prices of many items being sold at supermarkets in Vietnam to fall by 15-20 per cent.

Vietnam’s BRG Retail Co., Ltd. imports more than 1,000 items directly from Japan. After the Japanese yen weakened against Vietnamese đồng, the price of Japanese goods also went down.

"We usually sign an annual contract with a supplier in Japan, but we pick up the goods every month," said Nguyen Thuy Duong, Deputy General Director of BRG Retail Company.

Trinh Ba Ngoc, director of Osaka Semitsu, said not all Vietnamese businesses would immediately benefit from the depreciated Japanese currency. Annually, his company had to buy equipment from Japan at a cost of VND100 billion, however, his company had to purchase via an intermediary partner so it has not benefited from a depreciated yen.

In contrast, Vietnamese exporters working with Japanese partners suffer a loss when they convert Japanese yen into Vietnamese dong.

They explained that in the long run, a weak domestic currency will make imported goods more expensive. As a result, Japanese consumers will limit their spending on non-essential imports. This will lead to lower demand for imported goods from all countries, including Vietnam.

When the US dollar appreciates against other currencies, including Vietnamese dong, it increases the price competitiveness of exported goods from Vietnam. However, it raises costs for Vietnamese importers.

In the context of a sharp increase in the price of raw materials, a stable exchange rate will help play an important role in reducing pressure on imports, while minimising difficulties for businesses and supporting Vietnam’s economic recovery.

Due to the rapid and unpredictable fluctuations of the global market, the MoIT has continued to direct businesses to take advantage of Free Trade Agreements (FTAs) and make use of reduced tariffs.

In addition, the Ministry has also helped connect Vietnamese manufacturers with foreign suppliers via trade promotion, market development, and the application of the Internet or logistics services, while creating more favourable conditions for import and export activities.

The Bank of Japan’s (BOJ) policy of keeping Japanese rates pinned down to support the economy, combined with rising US interest rates, has been a major factor in the Japanese currency’s recent weakness.

To combat untamed inflation, the Federal Reserve raised its key interest rate by another 0.75 per cent on Wednesday night — further increasing how much consumers will pay on debt like credit cards, mortgages and other loans.

The federal funds rate, which indirectly determines the cost of loans, has increased from near-zero to a range of 2.25 per cent to 2.5 per cent. This is the fourth-rate hike in five months.

Source: VNS

MORE NEWS

Trendy jobs in Vietnam

New and fashionable professions are being pursued by many young people. But not everyone is succeeding.

Shooting star targets bright future

After the retirement of senior champions, the Vietnam shooting team is now relying on its younger athletes, such as 18-year-old Phi Thanh Thao, who was recently nominated as Best Young Athlete of 2022 at the prestigious Victory Cup.

Hanoi needs world-class entertainment sites to lure tourists

According to experts, the lack of world-class amusement and entertainment zones is a big "hole" in Hanoi's tourism.

HCM City tightens management of food labelled 'organic'

Many families choose organic food though recently several supermarkets and e-commerce platforms had to apologise to consumers after non-organic food was labelled and sold as organic.

Vietnam win ticket to 2022 Futsal Asian Cup quarterfinals

Despite their defeat in the match against Japan on October 2, Vietnam’s national futsal team will advance to the quarterfinals in the 2022 Futsal Asian Cup as it ranked second in Group D.

Many parts of Vietnam saw increased fertility rates during pandemic

Fertility rates over the past two years increased across many localities in Vietnam, and it was even higher than the total replacement birth rate, said Director General of the General Department of Population and Family Planning Nguyen Doan Tu.

HCMC plans to eliminate 20,000 slum areas by 2025

According to the Ho Chi Minh City Department of Construction, over the past 20 years, the city has removed 36,000 slum areas along canals, but there are still about 20,000 of them.

Vietnam to have 33 new highways by 2030

With 33 highway projects totaling nearly 3,000 km long planned for construction in 2021-2030, a decade of busy expressway building is expected.

Viettel, VNPT lead Vietnam’s Top 10 most valuable brands

Four telecommunications brands of Vietnam have a total value of 13,136 million USD.

Floods kill eight in Nghe An, Ha Tinh

Heavy downpours and floods in the north central region claimed the lives of eight people in Nghe An and Ha Tinh provinces as of 5:30pm on October 2.

Localities urged to rectify flaws in fishery sector

With the visit of the European Commission’s delegations ahead, Vietnam’s ports and fishers are aiming to remedy the previously criticised issues regarding international fishing regulations.

Market likely to continue to correct this week

Analysts said that in the current environment, financial markets will be very likely to continue revaluing.

Over US$6 bln earmarked for national socio-economic recovery

Prime Minister Pham Minh Chinh has issued a decision earmarking over VND147 trillion (US$6.39 billion) from the State budget for ministries, agencies and localities to carry out the socio-economic recovery and development programme.

FPT Software produces made in Vietnam chips

Vietnam’s FPT Software has launched a new subsidiary, FPT Semiconductor, marking a key milestone for the company as it enters the booming semiconductor industry.

Vietnam's entrepreneurial 'bosses': how are they doing?

There are several famous entrepreneurs in Vietnam who are called “boss”, including Vo Quoc Thang, Tran Dinh Long, Doan Nguyen Duc and Nguyen Duc Thuy.
back_to_top