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Vietnam’s weekly financial - monetary update (Week 52 – 2020)

Friday 01, 01 2021
Vietnam’s weekly financial - monetary update (Week 52 – 2020)

Vietnam’s macro-economic overview

In the domestic market, although the Covid-19 epidemic has been well controlled and there have been no new cases in the community, domestic trade, services and consumption were affected significantly due to the complicated development of the pandemic in the world.

This has caused the number of temporarily suspended enterprises to increase sharply while the number of newly established enterprises in the first eleven months of 2020 decreased by 1.9% over the same period last year. The negative impacts of the Covid-19 pandemic together with the recent natural disasters have weakened credit demand and lowered credit growth. According to the State Bank of Vietnam, as of December 21, 2020, credit only increased by 10.14% compared to the end of 2019 and by 11.62% over the same period in 2019. 
Regarding NPLs, the on-balance-sheet NPL ratio of credit institutions was maintained below 2% from the end of 2017 to the first months of 2020. However, due to the impact of the Covid-19 epidemic, as of the end of October 2020, the internal bad debt ratio had increased slightly and exceeded 2%. According to the State Bank, so far, bad debt has been controlled and drastically handled with many solutions.
In the field of trade, import and export activities have recorded positive developments. In particular, export turnover is estimated to increase by 11% over the same period last year, to 25 billion USD; import turnover is estimated to increase by 16.5% to 26.1 billion USD.
For 2020, the total export turnover is estimated at approximately 280 billion USD, up 5.9% over the same period last year, much higher than the forecast. 

Weekly financial - monetary situation and forecasts

Exchange rate

In the past week, the USD / VND exchange rate on the official market was stable, but experienced a sharp increase on the unofficial market. At VCB, compared to the previous week, the exchange rate of USD / VND was stable at 23,010 VND / USD (buying side) and 23,220 VND / USD (selling side). Compared to the beginning of 2020, the USD / VND has decreased by 10 VND / USD.

On the unofficial market, the USD / VND increased by 50 VND / USD on the buying side and by 60 VND / USD on the selling side, to 23,250 VND / USD and 23,290 VND / USD, respectively.
Exchange Rate
At the State Bank of Vietnam, the USD / VND exchange rate was stable at 23,125 VND / USD, which is 732 VND / USD lower than the ceiling price. Compared to the previous week, the USD exchange rate on the selling side increased by 20 VND / USD to 23,807 VND / USD and was 50 VND / USD lower than the ceiling price.

Meanwhile, the central exchanged rate announced by the State Bank applicable to December 24, 2020 was 23,163 VND / USD, increasing 19 VND / USD compared to the rate announced the previous week. Since early 2020, the central exchanged rate has been adjusted to decrease by 11 VND / USD (equivalent to a decrease of 0.05%). 

Gold price

World gold price increased in the context of the out-of-control Covid-19 epidemic in some countries, which caused the stock market to decline. As a result, investors had to resort to gold. Gold is forecasted to increase in 2021 due to benefits from macro support such as low interest rates, new cash flows continuously pumped out from bailout packages, and Covid-19 epidemic not under control.
Gold Price
At the end of the week, spot gold price was 1,877 USD / oz. Gold futures price in February 2021 on Comex New York was 1,882 USD / oz. On the Kitco trading exchange, spot gold prices were at 1,873.10 - 1,874.10 USD / oz, up 9.2 USD / oz (equivalent to an increase of 0.5%) compared to the previous week

World gold price was about 53 million VND / tael, which is 2.6 million VND lower than the domestic gold price.
Domestically, the price of gold has increased. Specifically, in Hanoi, SJC gold bought-in and sold-out prices were55.25 and 55.77 million dong / tael, respectively.

Source: Ministry of Industry and Trade
Compiled by VietnamCredit

Vietnam Economy

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