return icon Vietnamnet.vn

Vietnam financial market poses potential risks in rest of 2019

Ongoing trade tensions between the US and China have caused an array of adverse impacts on global gold, securities, and currency transactions, with the Vietnamese market not an exception.

 

 

 

{keywords}
 

 

With the escalating trade tensions, the global financial and monetary market is moving into a period of increasing risks during the remainder of the year. If the US-China trade frictions remain unresolved, fluctuations could continue to shake the financial market.

China has depreciated its currency to 7.04 yuan to 1 USD in an attempt to curb the negative impacts caused by the US tariffs levied on Chinese exports to the US.

A currency war could break out if economies continue to devalue their currency and lower interest rates. This would drag them into stagnation and then leading to a global crisis.

If yuan depreciation is kept on, it will put additional pressures on the Vietnamese dong (VND), making Chinese exports to Vietnam becoming cheaper, and worsening the latter’s trade deficit with the neighboring country.

Nguyen Tri Hieu, a financial expert, assumes that the devaluation of VND should stand at a rate of 3 per cent. Indeed, the level of VND devaluation remains moderate, meaning that there is plenty of room to depreciate VND in order to negate adverse impacts sourced by yuan depreciation.

However, the depreciation of VND could harm the local securities market as it could raise concerns among investors.

Since the beginning of the year, the financial market has absorbed a large amount of foreign capital inflows. If VND is devalued deeply, this will have a widespread influence on investment activities.

"There has been no phenomenon of moving cash flows from the securities or banking sectors to the gold market. But high gold prices may result in speculations and an investment shift”, Hieu noted.

Vietnam is regarded as a beneficiary from the US-China trade war. Indeed, many investors have planned to move their production facilities from China to Southeast Asian countries, including Vietnam. Tight control should be applied to stop the possibility that the production facilities ship Chinese goods to the Vietnamese market and have them relabeled as made-in-Vietnam products before being exported to the US.

Hieu suggested that amid soaring FDI inflows into the Vietnamese market, the Government should become more selective when choosing such investments in accordance with the overall economic development strategy.

MORE NEWS

Pet selfies at Mua Cave create online sensation

A collection of photos of a dog traveling with its owner in the northern province of Ninh Binh has amused many Internet users.

31-year-old monk ‘died and came back twice', 1.45m tall, weighs 28kg

Mr. Chau Soc Thon, 31, is a monk at Ta Pa pagoda in Tri Ton District in the southern province of An Giang, who stands at only 1m45 tall and weighs 28kg.

Vietnam's trade deficit returns

Vietnam incurred a trade deficit of US$2.7 billion in the first half of May, after earning a trade surplus of US$2.53 billion in January-April, according to the General Department of Vietnam Customs.

VIETNAM BUSINESS NEWS MAY 25

Mekong Delta eyes larger premium-quality rice areas to boost exports

Key southern economic region a magnet for FDI

With its advantages and thorough preparation in terms of infrastructure, transport and human resources, after the COVID-19 pandemic is put under control, the key southern economic region remains the leading destination for FDI flows.

BIDV, ADB release report on Vietnam’s financial market

The Bank for Investment and Development of Vietnam (BIDV) and the Asian Development Bank (ADB) on May 25 co-organised a workshop to announce a report on Vietnam’s financial market in 2021 and its 2022 outlook.

Vietnam's pharmaceutical industry sees promising propects

The pharmaceutical industry is growing steadily because input costs are stable compared to other industries and businesses are less affected in a high inflation environment.

Mindset change needed to face rising inflation

The entire world is facing a possible risk of an economic recession and high inflation. To prepare for any severe onslaught, Vietnam needs to think in terms of its own rising inflation and growth rate and be well prepared for the future.

Vietnam's aviation industry needs more financial help to recover

Vietnam needs policies to support and remove difficulties for domestic airlines to regain their growth momentum in the post-COVID recovery period, transport experts said yesterday.

Tay ethnic group’s banh peng pha ranks first among VN’s top 100 specialities

In Tay ethnic group language, bánh pẻng phạ or bánh trời (heaven cake) has put Bac Kan on the map as one of the traditional speciality centres of Vietnam.

Provinces lack doctors due to low income

Doctor shortages have been growing across many provinces, despite efforts from the health sector to attract human resources.

VIETNAM NEWS HEADLINES MAY 25

NA discusses amended draft laws on medical check-up and treatment, cinematography

Trans-Vietnam highway project lags two years behind schedule

The trans-Vietnam 2,744-km-long Ho Chi Minh Highway Project was planned to open in 2020 but so far only around 86 percent of the work has been completed, Minister of Transport Nguyen Van The told National Assembly deputies on May 24.

Big-budget films compete with each other in movie market

There have been films invested VND50-60 billion in the Vietnamese film market. This trend seems not to stop and more money will likely be poured into the movie market.

Hanoi’s second metro line project delayed further 5 years

Hanoi Urban Railway Management Board has proposed delaying the Nhon-Hanoi Railway Station project for five years, with an additional investment capital expenditure of more than VND4.9 trillion (US$211.2 million).
back_to_top