Vietnam Forex Reserves Fall to Below 2.5 Months of Imports
Vietnam’s forex reserves are down to below 2.5 months worth of imports as the dong has been weakening against the U.S. dollar, an International Monetary Fund (IMF) official said at the Consultative Group Meeting in Hanoi.
“The weaker dong was caused by soaring trade deficit as a result of the easing monetary and fiscal policy under Vietnam’s stimulus program,” Shogo Ishii, assistant director of the IMF’s Asia and Pacific Department, said at the two-day meeting.
The IFM official did not give an exact figure for Vietnam’s forex reserves, however.
He added that difficult access to foreign currencies have burdened costs on enterprises and adversely affected investor sentiment toward Vietnam.
Ishii also warned Vietnam of a modest recovery of its forex reserves in 2010 if foreign direct investment and official development assistance inflows remain firm.
Moody’s Economy.com highlighted in a report dated December 1 that the decline in forex reserves has increased the risk of a balance of payments crisis in Vietnam.
Meanwhile, Governor Nguyen Van Giau of the State Bank of Vietnam was quoted by the InfoTV channel on Oct 21 as saying that the country’s forex reserves fell to 12 weeks of imports, compared with 20 weeks by end-2008. (Labor)
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