Economy & Trade

Vietnam’s State Bank Lowers Interest Rates

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Nov. 4 – The State Bank of Vietnam has announced that the prime interest rate in Vietnamese dong will be reduced to 12 percent while the maximum lending interest rate for credit organizations lowered to 18 percent beginning November 5.

The move signals Vietnam's efforts to facilitate capital and ensure their liquidity.The new refinancing interest rate will be set at 13 percent from the previous 14 percent while the discount rate will be pegged at 11 percent from 12 percent.

Vietnamese Coffee Exports Surpass US$2 Billion

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Nov. 3 – According to the the Vietnam Coffee Association (VCA), exports of Vietnamese coffee have surpassed US$2 billion.

Vietnam is the world's second largest exporter of coffee. The country's 520,000 hectares of coffee plantations exports to 75 countries, including Germany, the United States, Italy, Spain, Belgium, Japan, Korea, France and the UK.

Instant coffee, roasted coffee grounds and 3 in 1 coffee mixes are sold domestically in addition to international markets in Canada, Germany, the United States, Australia and Korea.

Vietnam’s Ministry of Finance Proposes Raising Fuel Import Tariffs

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Nov. 3 – Vietnam's Ministry of Finance has submitted a proposal that will increase fuel import tariffs to compensate state budget losses due to falling global prices of crude oil.

Crude oil is a staple Vietnamese export. According to VietNamNet, locally sourced crude oil output will remain at around 18 to 20 million tonnes annually.

The import tax on gasoline should be increased to 25 percent from 15 percent, diesel to 15 percent from 10 percent, and kerosene and mazut to 25 percent from 15 percent, Minister Vu Van Ninh was quoted by Thanh Nien News as saying during a National Assembly session.

Vietnam Cancels Ban on Short, Flat-Chested Motorists

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Oct. 31 – Vietnam has cancelled a proposal to ban short, thin and flat-chested people from driving after it drew widespread criticism and ridicule from the public.

According to the ban, people shorter than 1.5 meters (4.9 feet) and weighing below 40 kilograms (88 pounds) or with a chest circumference of less than 72 centimeters would be prohibited from driving and applying for new drivers' licences.

The Vietnamese are naturally slender so the proposal led to jokes being made about the traffic police enthusiastically stopping female motorcyclists with tape measures or resorting to the use of padded bras to increase chest circumference.

Vietnam to Host Mekong Nation Summit

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Oct. 31 – Vietnam is set to host the third Ayeyawadi-Chao Phraya-Mekong Economic Cooperation Summit (ACMECS) and the fourth Cambodia-Laos-Myanmar-Vietnam Summit (CLMV) from Nov. 4 to 7.

The event is expected to attract foreign leaders and officials from relevant ministries of member countries to discuss solutions to improve cooperation agreements reached at previous summits.

Four hundred businessmen from regional countries, plus representatives from international organizations, and investors from Japan, the Republic of Korea, the US and European Union are also expected to attend.

Vietnam Removes Steel Export Tax

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Oct. 30 – Vietnam's Ministry of Finance has removed the 5 percent export duty on non-alloy iron and steel products beginning November 7 to help local manufacturers get rid of their excess stock.

According to the Vietnam Steel Association, firms have been unable to sell their stockpile of one million tons of steel billets and steel products worth an estimated US$1 billion because of lower demand.

In September, steel demand fell by 40 percent. It was aggravated further when the central bank increased interest rates to fight inflation leading to many construction and property firms unable to get bank loans

Vietnamese Companies Cut Back Recruitment as Cost of Materials Rise

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Oct. 29 – The rising cost of raw materials has led small-and medium-sized enterprises to cut back on recruitment, according to the Vietnam Association of Textile and Apparel.

Nguyen Thi Minh Tam, director of the Marketing and Communications Navigos Group, told the Vietnam News Agency that SMEs would not increase production by the end of the year, although large companies will still be in need of workers.

Some companies have even pared down their workforce by 15 to 30 percent to cope with the rising cost of commodities.

Vietnamese Banks Susceptible to High-Tech Crime

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Oct. 27 – Government officials have warned that banks in Vietnam are increasingly becoming a target for crimes committed over the internet.

Le Tan Don, vice head of Da Nang investigation police unit, spoke during a conference on banking crimes held in the central city of Da Nang, reports Thanh Nien News.

He said that the country is likely to encounter more hi-tech crimes in the banking sector in the future which could involve breach of security systems to draw out money from automatic teller machines, hacking of personal databases, identity theft, and stealing of credit card information.

Vietnam Releases List of Illegal Stock Sellers

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Oct. 27 – Vietnam's State Securities Commission (SSC) has released a list of companies selling stocks that do not meet basic regulations.

Some companies were foud guilty of selling shares violating the Law on Securities.
The Law on Securities stipulates that companies with charter capital under VND10 billion (US$606,000) are not qualified to sell securities.

The SSC has already sent the list of the violating companies to the Ministry of Planning and Investment, provincial and municipal People’s Committees, and the Department of Planning and Investment.

Vietnam’s Imports Slow Down to 43 Percent

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Oct. 24 – Vietnam’s import growth for October slowed down to 43 percent from the previous month's 48 percent as companies struggled to raise money, reports the General Statistics Office.

The trade gap from January to October now stands at US$16.3 billion. The State Bank of Vietnam has already cut its benchmark interest rate to boost the lending market.

“The trade deficit in Vietnam is all based on credit, and the government slammed on the brakes on credit very hard around the end of the first quarter,” Fiachra MacCana, head of research at Ho Chi Minh City Securities Corp. told Thanh Nien News, “Companies are now facing a very severe credit crunch.”

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