Business Briefing

Reference exchange rate

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at VND 23,417/USD on October 6, unchanged from the previous day. With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VND 24,119/USD, and the floor rate VND 22,714/USD.

The opening-hour rates at many commercial banks stayed stable. At 8:27 am, BIDV listed the buying rate at VND 23,735/USD and the selling rate at VND 24,015/USD, both unchanged from the end of October 5. Vietcombank also kept both rates unchanged at VND 23,710/USD (buying) and VND 24,020/USD (selling).

Photo: Zing

Banking news: Deposit interest rates continue to rise

Viet Capital Bank has unveiled a certificate of deposit for individual and institutional customers with an interest rate of up to 8.4% depending on the tenor. Customers can buy CoDs for just VND 10 million (USD 417) and receive interest of 7.5%, 7.8%, 8%, and 8.2% for terms of 6, 9, 12, and 15 months. For an 18-month term, they can get 8.4%. After six months they can freely transfer the CoDs and still enjoy higher interest rates than ordinary savings deposits, a bank spokesperson said.

After the State Bank of Vietnam raised its policy rate, many banks, including State-owned ones, raised interest rates for VND deposits. ABBANK has the highest rate of 8.8% for 13-month deposits of 500 billion VND (20.8 million USD) and above. Banks are also offering promotions to attract deposits.

For instance, from October 3 to December 30, customers who make deposits of 25 million VND (1,040 USD) and above at Vietbank can receive gifts such as a multi-function electric cooker, steam iron, vacuum cleaner, umbrella, kitchen cutting board, and others depending on the amount and term, according to VNA.

As of September 20 this year, deposit mobilization by credit institutions increased by 4.04% while credit growth was 10.54%. The rapid increase in credit has put pressure on banks’ liquidity. ACB Securities said the credit cap would be increased by 2% in the last quarter, while the SBV would continue to sell US dollars to keep the exchange rate in check, which would also put pressure on VND liquidity.

Public spending is expected to spurt in the remaining months of the year, meaning the money held by the State Treasury in banks will be drawn. Due to these factors, ACBS said, banks would probably increase deposit interest rates by another 0.5 percentage points this year to ensure liquidity.

Photo: Zing

Market news: E-retailing to grow 20% this year

The Covid-19 pandemic has put a brake on Vietnam’s economic growth over the last two years but, on the other hand, it has also fueled a significant uptick in e-commerce which recorded a 16% growth to USD 13.7 billion in retail revenue in 2021, according to the White Book on Vietnamese E-business 2022. Last year, the economic growth hit the lowest in 30 years, at just 2.58%, with key services sub-sectors experiencing a downturn.

Data from the General Statistics Office showed that retailing and wholesaling declined 0.21% year on year, causing the economy to decrease 0.02 percentage point. Warehouse and logistics plunged 5.02% and lodging and catering services 20.81%, leading to a drop of 0.3% and 0.51%, respectively, to the GDP growth.

Meanwhile, the share of turnover from e-retailing to last year’s total retail sales of goods and services was 7%, a year-on-year rise of 27% from 2020. E-retailing is forecast to surge 20% this year to 16.4 billion USD, compared to 5 billion USD in 2015. A 2022 study by big data analysis company Metric.vn indicated that Vietnam is emerging as the second largest e-commerce market in Southeast Asia, only after Indonesia.

The White Book on Vietnamese E-business 2022 also reported that with online marketplaces now a vital distribution channel in the era of digitalization, Vietnamese enterprises are investing more in expanding their presence on these platforms. Those doing business on social networks, such as Facebook, Zalo, and Instagram, spurred 41% in 2021 and 57% in 2022, according to the book.

Photo: Zing

Aviation news: Khanh Hoa to have more direct flights to Kazakhstan

Budget carrier Vietjet Air will begin carrying tourists from Almaty, the largest city in Kazakhstan, to the central province of Khanh Hoa later this month, as an effort to boost tourism recovery post-Covid-19. This is the outcome of cooperation between the airline and Anex Vietnam Travel and Trading Co., Ltd., according to deputy managing director of the company Bui Quoc Dai.

As planned, the carrier will operate two weekly flights on the Cam Ranh-Almaty route from the end of this month to April next year. The first flight is scheduled to depart from the Cam Ranh International Airport to the Almaty International Airport on October 25. It will return from Kazakhstan the following day. Each flight will transport some 180-200 passengers, according to Dai.

Tourists from Kazakhstan will spend their vacation for one to four weeks at hotels and resorts in Khanh Hoa, go shopping and take a city tour, among others. The first flights are expected to bring delegations to Khanh Hoa to survey the tourism potential and advantages of Vietnam in general and the central province in particular. In the first nine months of 2022, Khanh Hoa welcomed over 2.1 million tourists, including 150,000 foreigners – a 7.3fold increase over the same period of last year.

Photo: Vietnamnet

Weather Forecast

A cold front is moving from China to Vietnam that will cause temperatures in northern localities to fall considerably this weekend. The cold spell is forecast to hit Vietnam’s northern highlands on October 9 and will then sweep across the northern midland and plain areas, said Nguyen Van Huong, an official of the National Centre for HydroMeteorological Forecasting.

The cold front, the first to strike Vietnam this coming winter, will cause a sharp drop in temperatures in the mountainous region, with temperatures at night and early in the morning likely to fall below 20 degrees Celsius, said Huong.

It is forecast that as of the night of October 9 it will be cold in mountainous localities and turn cool in the plain region. This cold air wave is also likely to cause heavy rain in the northern, north-central and central regions. Northern Vietnam is anticipated to experience several cold spells in the second half of October this year. But the strongest cold spells are forecast to strike the region in December 2022 moving into January 2023.

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