World Bank Predicts US$2.6B Surplus in Vietnam Balance of Payments in 2010
Vietnam’s overall balance of payments (BoP) is expected to have a surplus of US$2.6 billion in 2010 versus a deficit of US$8.8 billion in 2009, fueling an expectation that the dollar exchange rate will be stable, state media reported, citing a World Bank economist.
An excess of US$11.7 billion in the capital account will help Vietnam cover a shortfall of US$9.1 billion in the current account this year, the Hanoi-based Chief Economist Martin Rama of the WB said.
Nearly US$7.3 billion worth of foreign direct investments and another US$1.5 billion of portfolio capitals will be disbursed in Vietnam this year, he said, attributing the shortfall to the soaring trade deficit and lower remittance inflow.
Martin Rama noted that local confidence in the dong has been improved, given the narrowing gap between official and free-market forex rates, calling on the State Bank of Vietnam to boost its dollar purchases to enrich the national forex reserves.
Boosting money supply could put pressure on the dong, leading to a further devaluation of the currency, he warned.
The WB economist, meanwhile, considered the high dong interest rates as the top concern for Vietnam at the moment as it may cause negative impacts on the recovery of the Vietnamese economy. (Banking Times)
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