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Indicators point to inflationary pressures (11/05)
06/08/2010 - 183 Lượt xem
With gold, oil and now the US exchange rate all up in Viet Nam, the pressure is squarely on local goods prices, said a local economic expert.
Nguyen Phuoc Thanh, director of the Bank for Foreign Trade of Viet Nam’s HCM City Branch, said that if the US dollar to Vietnamese dong exchange rate continued to climb (yesterday VND16,150 per US$1 – up VND100 on Sunday), local prices would be affected.
The rising exchange rate would result in an accumulation of US dollars to sell at higher prices, forcing local banks to raise interest rates on dong to draw in more deposits of the local currency, he added.
The interest rate is an important contributor to determine goods prices in Viet Nam, Thanh explained.
He said further that higher gold prices affect the real estate market as mortgages are calculated in gold bullion, while the higher US dollar hike would tell substantially on the economy, as most imported commodities are bought with dollars.
Deputy head of the Institute for Pricing and Market Scientific Research, Dr Ngo Tri Long, also said rising fuel prices would mean increased prices for raw materials that serve domestic manufacturing, driving up local prices.
Long, however, noted that business and economic sectors should work out measures to reduce production costs and thus lower product prices, as the Government plans to curb price hikes.
He suggested other counter-measures, including technology renovation and management to minimise raw material losses, enhance productivity and lower managerial costs.
Source: VietnamNews
