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Exchange rate increases - Exporters benefit

Wednesday - 04/07/2018 09:38
The increase of USD bank will help exporters more profitable. As the exchange rate increases, the profit for the dong increases.
The recent rise in the exchange rate is believed to be influenced by the USD appreciation on the global market after the Federal Reserve raised interest rates, negative VND-denominated interest rates, The psychology of the stock market in the domestic market has declined sharply.
In addition, there is the possibility of "withdrawal" of foreign investors. In fact, on the HSX and HNX exchanges, foreigners sold a large volume of stocks. In addition, June every year is the time when importers plan to import and pay for essential commodities such as petrol and essential goods.

The State Bank of Vietnam (SBV) was quick to send out the message. The US dollar price was mainly driven by psychological factors. At the same time, the manager confirmed that this agency is willing to sell dollars to intervene. The exchange rate was slightly higher and remained stable for the last two days.

USD prices in many commercial banks have continuously increased with a large amplitude in recent years. Specifically, at 15h30 today, the dollar price in many banks still anchored at 23k - 23,070 VND.

A few days ago, the selling price of some banks even exceeded VND23,100. Compared with the beginning of June, each dollar increased 215 dong, compared with the beginning of the year, each dollar is higher than 365 dong (equivalent to 1.5% increase).

Meanwhile, the central rate between VND and USD was listed by the State Bank of Vietnam at 22,630 dong. From the beginning of 2018 up to now, the central rate increased 225 dong, from 22,405 dong, equivalent to nearly 1% increase. This level according to SBV leaders and experts is still under control, nothing to worry.

Many economists said that the situation could still cause negative pressure because it will directly affect the production and business activities, especially the import of goods. The increase of USD price will affect import of raw materials, petrol and transportation costs. Particularly, businesses that borrow in foreign currencies are more affected by rising business costs. Moreover, exchange rates are not conducive to controlling inflation.

Export-oriented companies are likely to have an advantage when the exchange rate rises, but in fact few are worried. A leader of the garment company in Vinh Loc industrial zone lamented recently that domestic suppliers of raw materials have been reluctant to raise their raw materials prices higher than exchange rates.

"Yesterday, a supply partner for my company raised the issue of a 4% price increase, which made us worry about rising input costs, the loss of product competitiveness. export, "he said.

That is not to mention the products of many export companies are now mainly made from imported raw materials. "The advantage of exporting the product is hardly enough to compensate for the cost of rising raw materials," said the textile company. According to him, over time, many export orders of the company has decreased due to "expensive" price. Now the exchange rate increases, the higher raw material input as the production costs of the business team up.

A survey by HSBC and FT Remark (with 200 CFOs and nearly 300 fund managers from multinationals) recently found that more than half of CFOs believe that the risk is variable. Exchange rates are the type of risk that their business is least prepared to deal with. These concerns reflect the increasing volatility of currencies in the context of unstable geopolitical and macroeconomic outlook.

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