The Government Office has just issued a document on the registration fees for domestically manufactured and assembled cars.

Specifically, in consideration of the Ministry of Finance’s proposal registration fees for domestically manufactured and assembled automobiles and the Prime Minister’s direction, Deputy Prime Minister Le Minh Khai assigned the Ministry of Finance to liaise with relevant agencies in formulating a draft of the Government's decree on the registration fees for domestically manufactured and assembled automobiles as before.

The new registration fees will be applicable from July 1 to the end of 2023. The draft will be submitted to the Government before June 15.

At the request of the Deputy Prime Minister, the Ministry of Justice promptly appraised the above draft decree right after receiving the complete dossier from the Ministry of Finance, ensuring the deadline for submission to the Government.

The ministries of Finance and Justice take full responsibility before the Government and the Prime Minister for the quality and progress of the assigned tasks.

Previously, the Ministry of Industry and Trade proposed to reduce 50 percent of the registration fees as it said that enterprises in the domestic automobile manufacturing industry are facing high inventories while they hardly have access to capital and they are suffering high-interest rates, changes in exchange rates and inflation.

Automobile manufacturers belonging to the Vietnam Automobile Manufacturers Association (VAMA) and some provinces and cities also have petitions to the Ministry of Industry and Trade to reduce registration fees. The Ministry has also proposed the Government consider tax and registration fee reductions. In addition, the Ministry also suggested the extension and late payment of special consumption tax and value-added tax.

The Ministry of Finance reported that the support policy brought success last time to reduce the consumption tax as the budget revenue not only decreased but also increased to nearly VND2,000 billion.

Opening of first ever OCOP-POS showroom in Hanoi

OCOP-POS, a store chain focused on displaying and distributing products in the One Commune One Product (OCOP) program, is expected to contribute to the consumption of verified domestic goods.

Hanoi's consumers can now shop OCOP products at the first Point of Sale (POS) showroom in Noi Bai Industrial Zone, Quang Tien Commune, Soc Son district, on the outskirts of Hanoi.

This is one of the four OCOP-POS retail stores that OCOP Global Cooperative will open in cooperation with the District People's Committee in June and July.

The OCOP-POS showcases a wide range of around 500 products from various locations in Hanoi and across the country, featuring items such as Bac Son Tea, Minh Phu Mushroom, and other offerings from Trung Gia Agriculture and Business Services Co-op, she said.

In addition, consumers can access OCOP products through various platforms such as websites, apps, and e-commerce sites.

According to Nguyen Trung Thanh, Vice Chairman of the Hanoi Cooperative Alliance, there are currently about 2,400 active cooperatives in Hanoi. More than 60% of these operate in agriculture, while the remaining 40% specialize in trade, services, and promoting agricultural products and food.

Vietnam's e-commerce market to reach US$12.8 billion in next five years

Vietnamese firms are advised to change their mindset and build brands to make their business more sustainable globally.

The size of Vietnam's e-commerce market can hit VND300 trillion (US$12.8 billion) in the next five years, Gijae Seong, Amazon Head of Global Selling Vietnam, said at the cross-border e-commerce conference "Asian Elite, Global Breakthrough" in Hanoi on June 7.

Vietnam's transnational online commerce exports reached over VND80 trillion ($3.5 billion) in 2022, Gijae Seong said, adding that if Vietnamese enterprises receive more comprehensive support and apply e-commerce to export, the figure would grow in the next five years.

In 2022, the number of Vietnamese businesses opening a store on Amazon increased by 80% over the same period, and sales rose by 45%. Transborder e-commerce transparently benefits enterprises by helping them to quickly capture customer information, improve products to meet customer demand, globalize product brands in addition to globalizing products through digital transformation and globalization.

"Amazon encourages companies to change their mindset and not only outsource but also build brands to increase product value and make business more sustainable in the global market," Gijae Seong said.

At the event, Lai Viet Anh, Deputy Director of the Vietnam eCommerce and Digital Economy Agency under the Ministry of Industry and Trade, stressed that the gloomy global economy has significantly affected Vietnam's import and export activities.

In addition to the trend toward mobile and social e-commerce, the growth rate of Vietnam's transnational e-commerce has been more than twice as high as that of e-commerce in general, she added.

However, businesses, especially Vietnamese small and medium enterprises, face many barriers in terms of strict regulations of the import market; human capacity in product development and product competitiveness. These barriers are common to import and export activities, not only those through e-commerce platforms.

According to a report on the Vietnam E-Business Index (EBI) 2023 conducted by the Vietnam E-commerce Association (Vecom), Vietnam's e-commerce market is expected to grow by 25% by the end of 2023. The report is based on three sub-indexes: information technology, human resources and infrastructure, business-to-consumer e-commerce, and business-to-business e-commerce.

The booming e-commerce sector in 2023 and development in the following years is aided by a series of growth drivers such as the wave of digital transformation, consumers' trust, technological infrastructure, and favorable mechanisms and policies issued by the Vietnamese Government, the report said.

It added that with thousands of businesses nationwide, the e-commerce industry is expected to continue this high growth rate at about 25% by 2025.

Ho Chi Minh City speeds up value-added tax refunds

The tax department in Ho Chi Minh City has directed its affiliates to focus on speeding up value-added tax (VAT) refunds for businesses.

Deputy Director of the department Nguyen Tien Dung said almost all businesses that submitted sufficient dossiers have received tax refunds.

In the city, more than 80% of businesses get tax refunds first and will be checked later. The remaining 20% will be inspected first before getting the refund.

Most of the businesses have been receiving tax refunds, while only a few have not as their dossiers are being verified.

Dung also said that the businesses that have not yet got the VAT refund are mainly in the high-risk groups such as those in rubber, wood chips, or cassava industries.

The city’s tax department has been strengthening communications campaigns on tax refund policies, dossiers and procedures needed so that businesses can properly prepare tax refund applications, which helps create favourable conditions for tax authorities.

In addition, the department has also urged units to strengthen inspection and post-refund examination to promptly detect the use of illegal invoices or improper use of invoices.

Lang Son’s border gates speed up customs clearance

A delegation from the People’s Committee of the northern border province of Lang Son led by vice chairwoman Doan Thu Ha on June 7 inspected import/export activities at two border gates of Huu Nghi and Tan Thanh.

Currently, Huu Nghi border gate handles customs clearance for about 750 vehicles per day while its area for those carrying imports/exports can accommodate about 450 vehicles. So, vehicles are directed to non-tariff areas which have room for about 800 to 1,000.

Meanwhile, from May 26 to June 5, over 630 trucks carrying durian to China went through the Tan Thanh border gate.

On average, the border gate provides customs clearance for 300 vehicles per day while it can deal with about 1,100 - 1,200 at maximum. If the vehicles carrying agricultural products and fruits exceeds the capacity, they will be directed to a non-tariff area that can deal with about 100.

It is forecast that the demand for goods trading through Huu Nghi and Tan Thanh border gates will increase sharply as Vietnam and other countries are entering the peak time in the harvest season of fruits and agricultural products.

Quarantine authorities were asked to strengthen inspection and control of exports, especially Vietnamese fruits and agricultural products, to ensure compliance with the regulations of the two countries.

The provincial Industry and Trade Department was asked to continue overseeing the situation and removing difficulties and obstacles in import and export activities, especially in terms of mechanisms and policies. The department was requested to update the situation and consult provincial authorities and businesses about goods volumes transported to border gates.

Businesses were called on to shift to export products to China via official channels.

Organisations, individuals, and businesses are urged to take the initiative in business plans, fulfill financial obligations, and continue to improve infrastructure to meet import and export demand.

Ha requested agencies and units to strictly follow the directions of the provincial Party Committee and People's Committee on improving the business investment environment, preventing corruption and negativities at the border gate, and raising the responsibility of staff.

In the first five months of 2023, import and export activities at five border gates in the province were reported to run smoothly. On average, over 1,1000 vehicles traversed the border gates daily. Total import-export turnover topped 17.44 billion USD.

Train ticket discounts available on e-wallets this summer

Passengers who buy train tickets via VNPAY e-wallet and other mobile banking applications will get a discount of 100,000 VND (4.26 USD) for each transaction worth at least 1 million VND from now until July 23.

The Hanoi Railway Transport JSC (Haraco) said the promotion programme forms part of its cooperation with VNPAY, noting that 300 transactions are eligible for the promotion each day.

Earlier, the Saigon Railway Transport JSC said it has partnered with internet company VNG in putting up for sale train tickets on ZaloPay, an online payment platform.

ZaloPay has offered a discount of 50,000 VND on first train bookings via the e-wallet from May 19 to June 11, applicable to transactions worth from 500,000 VND.

MARD calls for early signing of protocol to boost farm produce trade with China

The Vietnamese Ministry of Agriculture and Rural Development (MARD) sent a diplomatic note to the General Administration of Customs of China (China Customs) on June 8, calling for the early signing of a protocol on food safety and quarantine requirements for aquatic exports and imports between the two countries.

It said that to implement the common perceptions between the two countries’ leaders as identified in the 2022 joint statement on continuing to enhance the comprehensive strategic cooperative partnership, the MARD sent a delegation to work with the administrations and customs departments of the Chinese provinces of Guangxi and Yunnan from May 29 to June 2, aiming to promote cooperation and increase the value of agricultural products traded via the two countries’ provinces sharing the land border.

The Vietnamese delegation and the customs departments of Guangxi and Yunnan agreed to coordinate with each other to propose China Customs soon finalise procedures for signing a protocol with the MARD on food safety, quarantine, and examination requirements for aquatic exports and imports between the two countries.

The MARD suggested China Customs permit more fruits, aquatic species and products of Vietnam to enter this country, license more Vietnamese aquatic product exporters that meet China Customs’ standards as confirmed by Vietnamese authorities, and allow raw aquatic products to be exported via border gates of Yunnan to ease customs clearance pressure on border gates and create the best possible conditions for businesses.

It also proposed China Customs order the customs departments of Guangxi and Yunnan increase the sharing of information about customs clearance procedures, tackle bottlenecks in a timely manner to improve the customs clearance capacity, hold rotary annual meetings in November between the Chinese provinces’ customs departments and relevant agencies of Vietnam, and assign units to act as liaison bodies.

New Zealand kicks off “Made With Care” campaign in Vietnam

The New Zealand Trade and Enterprise (NZTE) officially kicked off the “Made With Care” 2023 retail campaign on June 8, in which high-quality imported food and beverage (F&B) products will be offered in Ho Chi Minh City.

From June to end of July, Vietnamese consumers can visit retailers in the city including AEON Mall, Central Retail, LOTTE Mart and WinMart to purchase and taste outstanding imports from New Zealand.

New Zealand Ambassador to Vietnam Tredene Dobson said that the F&B sector is an exemplary successful story in the two countries’ trade relations, accounting for the majority of export turnover. F&B products from New Zealand to Vietnam in 2022 reached a total value of 798 million NZD (about 484 million US).

The campaign aims to expand brand value of New Zealand’s F&B products in the Vietnamese market while contributing to further bolstering the two countries’ bilateral collaboration in the area.

 Representatives of the New Zealand Trade and Enterprise (NZTE) and local retailers sign MOUs at the event (Photo: VNA)
On the occasion, the New Zealand diplomat and representatives of 10 New Zealand companies presented the token of a charity programme to four non-governmental organisations based in Vietnam, sending seven tonnes of fruit and nearly 1,000 litres of milk to local children and the elderly.

US extends investigation into wooden cabinets from Vietnam

The US Department of Commerce (DOC) has announced the extension of the time to issue the final conclusion on the investigation of the product scope for wooden cabinets imported from Vietnam, according to the Trade Remedies Authority of Vietnam (TRAV).

The final conclusion is expected to be issued on August 17, it said.

Previously, the DOC on March 17 issued a preliminary determination on the investigation with the allegation that the items had components such as doors, drawer fronts, and wooden frames produced in China and were combined with parts manufactured in Vietnam. Therefore, they are subject to trade remedies the US is levying on similar products of China.

According to TRAV, since April 2020, the US has imposed anti-dumping and subsidy duties on wooden cabinets originating from China with anti-dumping duties ranging from 4.37% to 262.18% and anti-subsidy duties ranging from 13.33% to 293.45%.

On May 24 and June 7, 2022, the DOC initiated the investigation into the product scope and anti-circumvention of wooden cabinets imported from Vietnam.

State budget revenue nears 770 trillion VND in five months

State budget collection in the January-May period was estimated at over 769.6 trillion VND (32.75 billion USD), equivalent to 47.5% of the estimates for the whole year, the Ministry of Finance reported on June 8.

According to the ministry, although the domestic revenue in the reviewed period was quite good compared to the estimates, the monthly tended to decrease as the January collection reached 14.7% of the estimate, February 7.7%, March 8.9%, April 9.9%, and May 6.4%. The domestic collection in the first five months was equal to 97.1% of that recorded in the same period last year.

The ministry said 17 out of the 63 provinces and centrally-run cities recorded state budget revenue topping 48% of this year’s targets.

Thirteen localities saw the collection higher than that in the same period of 2022, and 50 others were lower.

Meanwhile, 653.1 trillion VND from the state budget was spent in the period, representing 31.5% of this year’s plan, and rising by 10.9% year-on-year, statistics show.

The Finance Ministry said expenditures in the Jan – May period were performed as planned, meeting demand for socio-economic development, defence and security, state management, debt repayment, and implementation of social security tasks.

New Zealand kicks off “Made With Care” campaign in Vietnam

The New Zealand Trade and Enterprise (NZTE) officially kicked off the “Made With Care” 2023 retail campaign on June 8, in which high-quality imported food and beverage (F&B) products will be offered in Ho Chi Minh City.

From June to end of July, Vietnamese consumers can visit retailers in the city including AEON Mall, Central Retail, LOTTE Mart and WinMart to purchase and taste outstanding imports from New Zealand.

New Zealand Ambassador to Vietnam Tredene Dobson said that the F&B sector is an exemplary successful story in the two countries’ trade relations, accounting for the majority of export turnover. F&B products from New Zealand to Vietnam in 2022 reached a total value of 798 million NZD (about 484 million US).

The campaign aims to expand brand value of New Zealand’s F&B products in the Vietnamese market while contributing to further bolstering the two countries’ bilateral collaboration in the area.

 Representatives of the New Zealand Trade and Enterprise (NZTE) and local retailers sign MOUs at the event (Photo: VNA)
On the occasion, the New Zealand diplomat and representatives of 10 New Zealand companies presented the token of a charity programme to four non-governmental organisations based in Vietnam, sending seven tonnes of fruit and nearly 1,000 litres of milk to local children and the elderly.

US extends investigation into wooden cabinets from Vietnam

The US Department of Commerce (DOC) has announced the extension of the time to issue the final conclusion on the investigation of the product scope for wooden cabinets imported from Vietnam, according to the Trade Remedies Authority of Vietnam (TRAV).

The final conclusion is expected to be issued on August 17, it said.

Previously, the DOC on March 17 issued a preliminary determination on the investigation with the allegation that the items had components such as doors, drawer fronts, and wooden frames produced in China and were combined with parts manufactured in Vietnam. Therefore, they are subject to trade remedies the US is levying on similar products of China.

According to TRAV, since April 2020, the US has imposed anti-dumping and subsidy duties on wooden cabinets originating from China with anti-dumping duties ranging from 4.37% to 262.18% and anti-subsidy duties ranging from 13.33% to 293.45%.

On May 24 and June 7, 2022, the DOC initiated the investigation into the product scope and anti-circumvention of wooden cabinets imported from Vietnam.

Vietnamese firms explore beauty industry of Russia

A Vietnamese business delegation led by Le Khanh Van, Director of the Centre for Science-Technology Application and Startup (COSTAS) under the Vietnam Association for Intellectual Women (VAFIW), attended the third “Made in Russia” - the leading exhibition in the beauty industry of Russia that took place in Moscow from June 6-7.

The event gathered leading experts in Russia, as well as celebrities and cosmetics manufacturers.

Addressing the opening ceremony, Van said that the exhibition is a good chance for Vietnam to access new technology and products in the industry, seek partners and strengthen the trade of products in this field between Vietnam and Russia.

The Vietnamese booth showcased hormonal products, herbal toothpaste, shampoo, collagen to nutritional products such as cordyceps and black garlic, among others.

At the event, VAFIW signed cooperation agreements with Russia’s Rimilinh Group and the Union of Manufacturers of Health and Beauty Products of Russia.

HCM City seeks stronger cooperation between local firms and Japanese counterparts

Vice Chairman of the Ho Chi Minh City People’s Committee Vo Van Hoan on June 8 suggested enhancing cooperation and coordination between Japanese firms in the city and local enterprises.

At a reception for Mizushima Kozo, President of the Japanese Chamber of Commerce and Industry in HCM City (JCCH), and a delegation of Japanese businesses, Hoan said the city always supports the chamber’s operation, and stands ready to remove obstacles facing Japanese firms, and listen to their proposals during its construction and development.

He noted that the increasing number of the JCCH’s members reflects the close coordination between local authorities and Japanese enterprises, as well as the attractiveness of the local investment environment.

The official used the occasion to thank Japanese businesses for their contributions to the city’s development, especially in COVID-19 prevention and control and post-pandemic economic recovery and development.

Hoan suggested the JCCH step up connectivity activities with local businesses to exchange information and seek cooperation opportunities in such areas as goods supply chain and high-quality personnel training, while organising culture and sport exchanges.

For his part, Kozo lauded HCM City’s efforts in maintaining annual roundtable conferences to remove roadblocks to the operation of Japanese firms, enabling them to contribute to the development of the country’s largest economic hub.

Japanese companies wish to maintain and expand contact with local authorities, he said, suggesting HCM City leaders help them organise culture and sport activities in the city in 2023 to mark the 50th anniversary of the Vietnam-Japan diplomatic ties.

Deputy PM urges early handover of clean land for Long Thanh airport’s sub-projects

Deputy Prime Minister Tran Hong Ha has requested the Airports Corporation of Vietnam (ACV) to closely coordinate with the People’s Committee of the southern province of Dong Nai to accelerate ground clearance work and early hand over clean land for construction of sub-projects of Long Thanh international airport.

The Deputy PM's instructions were detailed in a document released by the Government Office on June 8 following his meeting with the working group on the project’s first-phase construction. The handover of land for construction of working roads and the airport's phase 2 should be completed in June this year, he said, stressing that the progress of land clearance is a prerequisite to ensure the project progress.

The Ministry of Transport was tasked with directing ACV - the investor of the project - to study the construction plan of the second phase of the project.

It was also required to work with the National Assembly’s Office regarding adjustments to the project’s land acquisition, compensation, support and resettlement.

Starting in 2021, the Long Thanh International Airport project covers more than 5,000ha across six communes in Long Thanh district of Dong Nai. It has total investment is 336.63 trillion VND (14.3 billion USD) and is divided into three phases.

In the first phase, a runway and one passenger terminal along with other supporting facilities will be built at a cost of 109.1 trillion VND to serve 25 million passengers and 1.2 million tonnes of cargo each year.

Once fully completed by 2050, the airport will be able to handle 100 million passengers and 5 million tonnes of cargo annually.

Located 40km east of Ho Chi Minh City, it is expected to relieve overloading at Tan Son Nhat International Airport, currently the country’s largest, in the southern metropolis.

Vietnamese wood exports decrease over five-month period

The export of wood and wooden products continued a downward trajectory, with the export value hitting US$5.1 billion over the past five months of this year to mark a year-on-year fall of 27%.      

Of the figure, the export of wooden products valued at US$3.4 billion recorded a drop of 34% compared to figures from the previous year.

According to details given by the Ministry of Industry and Trade, May alone witnessed the nation’s export value of wood and wooden products stand at an estimated US$1.2 billion, up by 10% against April but down by 14% against May, 2022.

Most notably, May saw exports of wooden products reach US$801 million, up 3% on-month but down by 16% on-year. Wooden furniture represented the key export item in terms of the structure of wood and wooden products, duly accounting for 60% of total exports of wood and timber products.

Throughout the January to May period, the export value of wooden furniture fell sharply by 38% against the same period from last year due to slowing global demand.

High inflation across the world has forced consumers to tighten their spending as they seek to decrease demand for non-essential goods such as wood products.

Those factors have led to Vietnamese export value of wood and wooden products plunging during the reviewed period.

Real estate living on borrowed time

Mass dissolution and bankruptcy can strike so unexpectedly in the real estate sector that firms feel like they are living on borrowed time.

"Misery, unattractiveness, deficiency" have been the three words used in a recent report by the Vietnam Association of Realtors (VARS) to describe the dire situation of realty firms amid the economic downturn.

The report cited supply shortages as a factor behind the sector's stagnation. Housing supply in 2022 dwindled down to merely 20 per cent of what it was in 2018. In Q1/2023, a paltry 25,000 apartments went on sale, but most of them were excess inventory.

The situation is not better on the demand side, which has been on the decline since last year. The number of real estate deals reached 19,000 in 2022, paling in comparison with that in 2018 (over 110,000). In Q1/2023, the market became a shadow of its former self, with merely 2,700 deals.

The waning confidence of homebuyers in the sector was the first reason behind their tightening budget on realty properties. High deposit rates also play a part by incentivising investors to put their money in banks rather than in real estate.

Another reason involves the global economic downturn that has been sapping demand across the board, and real estate was among the sectors bearing the brunt of the weakening demand.

DKRA Group said the resort real estate was stuck in limbo as most of the products in the segment can't sell. The global economic depression hit so hard that the demand for villas and shophouses fell by 98 per cent and 99 per cent, respectively, in April.

A VARS expert said financially-drained realty firms were 'drowning'. Despite their attempt to trim ranks, few could keep their heads above water.

"Problems in the sector remain unsolved for quite a while, driving firms into distress," said the expert.

He also said lifesavers had been thrown at the sector since early 2022 to keep firms afloat but many couldn't make it owing to the severity of the downturn.

In the first five months of 2023, 554 realty firms went out of business, up 30.4 per cent year-on-year. Others became worse off as their revenue and profit fell by nearly 7 and 40 per cent, respectively.

Six of the 20 largest had to shed staff to offset the fall in sales. A noteworthy one was Dat Xanh Group, which cut headcounts by 41 per cent last year. Novaland Group followed suit with a cut of 20 per cent.

But the bad news doesn't stop there. Layoffs continued into 2023, with more employees losing their jobs here and there. Notably, Dat Xanh made additional 1,384 redundancies in Q1.

"Firms have been stretched to their limit. If they are left drowning in hardship for longer, mass bankrupcies would be inevitable," he added. 

Policy interest rate expected to further reduce in H2 2023

The State Bank of Vietnam (SBV) may further reduce its policy interest rate if the Fed’s monetary policy reverses in the second half of this year, according to analysts from VNDirect Securities Company.

The analysts also expect the average 12-month deposit interest rate will drop to 7 per cent per year in 2023.

Though deposit interest rates have decreased by 0.5-2 percentage points per year for all terms in recent months, especially after the SBV reduced its policy interest rates on March 15 and April 3 this year, lending interest rates have had a lower decrease compared to the reduction of deposit rates, except at State-owned banks, which has caused difficulties for many firms needing capital.

Ly Kim Chi, chairman of HCM City Food Association and vice president of HCM City Business Association, said with loan interest rates around 10 per cent per year, firms will struggle to recover. Therefore, she suggested that the SBV further reduce its policy interest rate by 0.5 percentage points to create conditions for banks to reduce lending rates.

According to banking expert Can Van Luc, net profit margin (NIM) of banks in 2022 was 3.5 per cent, higher than 3.2 per cent in 2021. In 2023, banks' NIM will likely return to the level of 2021. This year, both the Government and the SBV have requested commercial banks to reduce interest rates. Many commercial banks have deployed preferential interest rate loan packages to stimulate credit demand.

Explaining the current high lending interest rate, the SBV said the banking system is still the main capital provider for the economy. Viet Nam's economy depends mainly on bank credit capital with the credit-to-GDP ratio at the end of 2022 being 125.3 per cent while the capital demand for economic development is always high, which creates pressure on lending interest rates.

After the COVID-19 pandemic, the economy recovered so the capital demand for production and business increased, the banking system used the maximum amount of raised capital to provide capital for the economy. Currently, the gap between deposit and credit in Vietnamese dong is at VND167 trillion and the ratio of credit per deposit in the dong is at 101.4 per cent, slightly down from 102.3 per cent at the end of 2022.

The banking system mainly raises short-term capital (about 88 per cent of deposits have a term of 12 months or less), but it still has to meet the medium- and long-term lending needs (more than 52 per cent of the dong-denominated outstanding loans of the banking system is medium and long term). Therefore, it has put pressure on deposit rates.

Besides, Viet Nam deeply integrates into the global economy so fluctuations in the world's financial and currency markets have a strong and rapid impact on domestic interest rates and exchange rates. The world’s interest rate level increased in 2022 and remained at a high level in the first months of 2023. Major central banks also continue to implement the roadmap to tighten monetary policy.

In addition, domestic inflation pressure also affects interest rates. Average inflation in the first four months of 2023 was at 3.84 per cent and core inflation was at 4.9 per cent, while the inflation target for 2023 is 4.5 per cent.

Inflationary pressure makes people expect a positive real interest rate, so it is difficult for banks to reduce deposit rates, leading to banks’ high input costs. Therefore, raised capital of the whole industry as of April 27, 2023 only increased by 1.78 per cent, while the credit growth rate was 3.04 per cent, which makes it difficult for banks to cut lending interest rates.

Pham Chi Quang, director of the SBV’s Monetary Policy Department, said lending interest rate cut in the market was slower than that of deposits because banks had previously raised deposits at high interest rates. Besides, each bank has a different interest rate reduction roadmap depending on their cost of raised capital and financial strength.

According to the SBV, the lending interest rate is agreed upon by banks and the customer according to the market capital supply and demand and the customers’ credit level.

However, on the basis of macro-economic developments as well as domestic and foreign monetary markets, the SBV will study and control interest rates in accordance with the macro balance, inflation and monetary policy target. It will also encourage banks to implement cost-saving solutions to reduce lending interest rates in order to support firms and households to recover and develop production and business. 

Vinfast launches mini electric car for mass market

VinFast officially launched the VF 3, a mini electric car model designed specifically for the Vietnamese market.

Boasting a compact and contemporary design, the VF 3 offers numerous benefits, making it suitable for a wide range of applications and operating environments. This eco-friendly vehicle is also equipped with smart features, providing a dynamic mobility option for individuals of all backgrounds.

The VinFast VF 3 is part of the small car segment, specifically classified as a mini car. The VF 3 represents VinFast's initial endeavor in developing a small car model design dedicated to the distinctive characteristics and driving patterns of domestic consumers.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes