Photo: Thai Binh Gov

Business Briefing

Gold rate

Gold price on June 14 dropped sharply in the domestic market. As of 9 am, the gold price is listed by DOJI Group at VND 66.9 million/tael (buying) and VND 67.8 million/tael (selling). Compared to the previous session, the gold price at DOJI decreased by VND 1.55 million/tael (buying) and VND 1.45 million/tael (selling). Meanwhile, Saigon SJC listed the buying price at VND 67.55 million/tael and the selling price at VND 68.35 million/tael.

Reference exchange rate

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at VND 23,089/USD on June 14, up VND 18 from the previous day. With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VND 23,781/USD, and the floor rate is VND 22,396/USD.

The opening-hour rates at some commercial banks decreased. At 8:30 am, Vietcombank listed the buying rate at VND 23,030/USD, and the selling rate at VND 23,340/USD, unchanged from the rates at the end of June 13. Meanwhile, BIDV cut both rates by VND 10, listing the buying rate at VND 23,060/USD and the selling rate at VND 23,340/USD.

Finance news: Bank interest margins under pressure due to high inflation

Vietnam's consumer price index in the first five months of the year edged up 2.25 percent year on year while core inflation rose by 1.1 percent, according to the General Statistics Office (GSO). Experts are concerned it will be difficult for the country to meet the Government's inflation target of 4 percent this year due to increasing prices of oil and basic commodities in the wake of the war between Russia and Ukraine.

A Viet Dragon Securities Corporation (VDSC) representative told Vietnam News the oil market was continually overheating after reaching 102 USD per Brent oil on average in the first five months of 2022, up 62 percent from the same period last year. VDSC's analysts forecast two scenarios for the country's inflation this year.

According to Nguyen The Minh, analysis director of Yuanta Vietnam Securities Company's individual customer division, rising inflation will directly affect banks as they have to raise deposit interest rates to make them higher than the rising inflation rate to attract depositors and compete against other investment channels such as real estate and securities.

Meanwhile, banks cannot raise the lending interest rate correspondingly or even have to keep the rate unchanged to support the economic recovery as directed by the central bank. The move will affect banks' NIM and profit growth adversely, Minh said. Industry insiders are also concerned as bank profits currently rely on about 70 percent of the credit. A decrease in NIM, therefore, will affect profits. Deposit interest rates are under increasing pressure due to rising inflation and stronger-than-expected credit growth.

By the end of April, the Vietnamese dong interest rates traded between banks on the interbank market declined by 0.5-0.7 percentage points per year but increased again in early May 2022. Specifically, the interbank interest rates in early May 2022 were 0.1-0.4 percentage points per year higher than the rates at the end of April on short terms of less than one month. Not only small-sized banks, but large-sized banks, which previously always kept deposit interest rates at very low levels, have recently also adjusted their rates up as a move to increase the competition in attracting depositors.

Photo: Vietnam Agriculture

Export news: Vietnam finalizes procedures to export longan to Japan

Vietnam is finalizing procedures to get an allowance to export longan to Japan – one of the world’s choosiest markets. Japan has always been a market with strict standards in importing agricultural products. Meanwhile, more and more Vietnamese people are living and working in Japan, and Japanese consumers' tastes are also changing. Vietnamese food is gradually becoming more popular with great potential to gain a foothold in the market.

However, entering this choosy market is a process requiring efforts from many sides. Currently, Vietnam is allowed to export three kinds of fresh fruits to this market, namely dragon fruit, Cat Chu mango, and lychee. The Department of Plant Protection under the Ministry of Agriculture and Rural Development is conducting negotiations to open more doors for Vietnamese longan to penetrate this market.

In 2020, the Department of Plant Protection proposed applying the cold-pressure processing method for all varieties of longan and was accepted by the Japanese Ministry of Agriculture, Forestry, and Fisheries (MAFF). The Japanese and Vietnamese sides spent many months developing a plan to carry out experiments applying this method. If the cold-pressure processing technology is approved by the Japanese side, Vietnam will have a great opportunity to export this kind of fruit to this market. Last year, Vietnam exported over 117,500 tonnes of longan, including over 11,000 tonnes of fresh longan. Vietnam fresh longan is currently sold in 17 countries and territories across the world.

Photo: Thanh Nien

Weather forecast

June 14 - 15: From the night of June 14, the North and North Central region will go through heavy rain. Moderate rain continues until June 15. Hanoi has heavy rain and thunderstorms on June 14 night. There is a high risk of flash floods and landslides in the mountainous provinces.

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