In January 2021, the domestic economy was quite stable. Import-export turnover in January 2021 was estimated at $53.9 billion. In particular, export turnover was $27 billion, increasing by 46.7% compared to January 2020 and import turnover was estimated at $26.9 billion, increasing by 43.7%. Thus, the trade balance of Vietnam in January 2021 saw a surplus of $100 million USD, while in the same period last year, there was a trade deficit of $322 million.
With the success it achieved in 2020, Vietnam is considered to be one of the best performing economies in Asia amid the Covid-19 pandemic. Currently, Vietnam is highly appreciated by many major financial institutions on its economic prospects for 2021. According to the Vietnam Institute of Economics (Vietnam Academy of Social Sciences), Vietnam's GDP growth in 2021 is forecast to reach about 6.9% (most positive result) or 3.48% (most negative result). The highest growth (6.9%) may be achieved if the world economy grows strongly, oil prices are stable and the domestic economy attracts more FDI.
However, there still exist many unpredictable factors for Vietnam's economic growth in the coming months such as the delay in vaccine distribution, the rising trade tensions, the disruption in supply chain, the fluctuations in the foreign exchange market or the rebound in lending interest rates, or most negatively, the re-outbreak of the Covid-19 pandemic.
Exchange rate
In the past week, the USD / VND exchange rate decreased on the official but increased on the unofficial markets. At VCB, compared to the previous week, the exchange rate of USD / VND decreased by 15 VND / USD, to 22,945 VND / USD (buying side) and 23,150 VND / USD (selling side). Compared to the beginning of 2020, the USD / VND has decreased by 40 VND / USD.
On the unofficial market, the USD / VND exchange rate increased by 40 VND / USD on the buying and selling side, to 23,520 VND / USD and 23,560 VND / USD, respectively.
At the State Bank of Vietnam, the USD / VND exchange rate was stable at 23,125 VND / USD, which is 716 VND / USD lower than the ceiling price. Compared to the previous week, the USD exchange rate on the selling side increased by 3 VND / USD to 23,791 VND / USD and was 50 VND / USD lower than the ceiling price.
Meanwhile, the central exchanged rate announced by the State Bank applicable to January 28, 2021 was 23,147 VND / USD, up 3 VND / USD compared to the rate announced the previous week.
Interest rates
As the Lunar New Year is coming round the corner, the VND interbank average interest rate rose again yet at slow rate.
On January 26, 2021, the average interbank interest rate increased for most terms compared to the previous week, and was stable for 9-month term. Specifically, the average overnight, 1-week and 2-week interbank interest rates increased to 0.11% / year, 0.18% / year and 0.27% / year, respectively.
The Covid-19 has also the VND interest rates. Vietnam has just recorded a number of new Covid-19 cases in the community, which has caused fear to people. In addition to the need for cash during the Lunar New Year, the Covid-19 pandemic also causes people to withdraw money from the bank. This makes the liquidity of the banking system less abundant than before.
However, the average interbank interest rate did not increase sharply and remained at a low level. Therefore, the State Bank has not made a new move in the open market yet. T-bills and outstanding OMO remained flat at 0 after the first month of 2021.
Gold price
The world gold price decreased while there was a strong increase in the value of the USD. Investors are waiting for the business results of big companies in the US businesses and economic prospects.
At the end of the week, spot gold price was 1,837 USD / oz. Gold futures price in March 2021 on Comex New York was 1,843 USD / oz. On the Kitco trading exchange, spot gold prices were at 1,843.90 - 1,844.90 USD / oz, down 27.4 USD / oz (equivalent to a decrease of 1.46%) compared to the previous week.
World gold price was about 52.2 million VND / tael, which is 4.2 million VND lower than the domestic gold price.
The domestic gold price fluctuated heterogeneously. In Hanoi, SJC gold price increased by 50,000 VND / tael (purchased) to 56.1 VND / tael.
Source: Ministry of Industry and Trade
Compiled by VietnamCredit
