Despite facing many difficulties caused by the third outbreak of Covid-19 epidemic, Vietnam’s economy grew quite positively in the first two months of 2020. In particular, the macro-economy continued to be stable while inflation was kept at a low level. CPI in February 2021 increased by 1.52% over the previous month and by 1.58% over December 2020.
The index of industrial production (IIP) in February 2021 was estimated to decrease by 21.1% compared to January 2021 and by 7.2% compared to the same period in 2020 due to the Tet Holiday and the impact of the Covid-19 epidemic. However, industrial production in January 2021 increased significantly compared to January 2020 (22.5%), so for the first two months of 2021, the IIP was estimated to increase by 7.4% yoy. Meanwhile, the PMI calculated by IHS Markit also recorded positive signals with 2 consecutive months of increase. In February 2021, Vietnam's manufacturing PMI reached 51.6 points as there were new orders while output, jobs and purchases continued to increase.
Domestic consumption also recorded improvement. The total estimated retail sales of consumer goods and services in February reached 439.7 trillion VND, which is 5.4% lower than that in January 2021 but still 8.2% higher than the same period last year. In the first 2 months of 2021, total retail sales of consumer goods and services reached 904.5 trillion VND, increasing by 5.49% over the same period in 2020.
In the past 2 months, there have been 18.1 thousand newly established enterprises with a 52.2% increase in registered capital and a 9.7% increase in number of employees over the same period last year. The average registered capital of a newly established enterprise in 2 months also increased by 46.4% over the same period last year. In addition, there were more than 11 thousand enterprises returning to operation, decreasing by 7.6% over the same period last year. These are very positive signals in the context that the Covid-19 epidemic seems hard to control, significantly affecting production and business activities.
Despite some positive results, in general, there are still many risks. In particular, the biggest risk is that the Covid-19 epidemic is increasingly unpredictable. Domestic consumers' business confidence index continued to decline for the third consecutive month when it reached its lowest level since August 2020.
Exchange rate
In the past week, the USD / VND exchange rate was stable on the official market but decreased on the unofficial markets. At VCB, compared to the previous week, the exchange rate of USD / VND was stable at 22,900 VND / USD (buying side) and 23,110 VND / USD (selling side). Compared to the beginning of 2021, the USD / VND has decreased by 80 VND / USD.
On the unofficial market, the USD / VND exchange rate decreased by 10 VND / USD on the buying and increased by 260 VND / USD on the selling side, to 23,770 VND / USD and 23,820 VND / USD, respectively.
At the State Bank of Vietnam, the USD / VND exchange rate was stable at 23,125 VND / USD, which is 722 VND / USD lower than the ceiling price. Compared to the previous week, the USD exchange rate on the selling side increased by 21 VND / USD to 23,797 VND / USD and was 48 VND / USD lower than the ceiling price.
Meanwhile, the central exchanged rate announced by the State Bank applicable to March 4, 2021 was 23,152 VND / USD, up 22 VND / USD compared to the rate announced the previous week.
Currently, there is a huge supply of foreign currency in Vietnam thanks to the reduction of exchange rates at commercial banks. Commercial banks sold a large amount of foreign currency futures to the SBV in January 2021. Besides, the balance of trade in goods in the first 2 months of 2021 saw an export surplus of about 1.29 billion USD, which facilitated the SBV to buy a large amount of foreign currency from commercial banks.
Interest rate
Last week, the average interbank interest rate continued to decline. Liquidity of the banking system was abundant, and the State Bank is no longer under pressure to intervene in the open market like before the Lunar New Year.
On March 2, 2021, the average interbank interest rate decreased for many terms compared to the previous week, reaching the lowest level in nearly a month. Specifically, the average interbank interest rate for the overnight, 2-week, 1-month and 6-month terms decreased by 0.0 percentage point, 0.13 percentage point, 0.22 percentage point and 0.05 percentage points to 0.35% / year, 0.58% / year, 0.97% / year and 2.62% / year, respectively. In contrast, the 1-week and 3-month average interbank interest rates rose by 0.02 percentage points and 0.05 percentage points to 0.78% / year and 1.57% / year.
Gold price
The world gold price decreased due to the sharp increase in the US dollar.
At the end of the week, spot gold price was 1, 714 USD / oz. Gold futures price in April 2021 on Comex New York was1,711 USD / oz. On the Kitco trading exchange, spot gold prices were at 1,714.2 – 1,715.2 USD / oz.
World gold price was about 48.6 million VND / tael, which is 7.4 million VND lower than the domestic gold price.
The domestic gold price continued to decrease. In Hanoi, SJC gold price decreased by 150 thousand VND / tael (purchased) and by 250 thousand VND / tael (sold) to 55.65 – 56.07 million VND / tael.
Source: Ministry of Industry and Trade
Compiled by VietnamCredit
