Vietnam’s State Bank yesterday dismissed rumors of planned currency reforms and possible bank failures, a day after it devalued the dong and raised interest rates.
“There will be no change in the money at this time, and no banks will collapse,” said Duong Quoc Anh, director of the State Bank’s Banking Department.
“The Prime Minister has said that there will be no currency change. The State Bank governor has said that no banks are in trouble at all,” Duong said.
After the State Bank raised the prime interest rate from 12 to 14 percent effective on Wednesday, rumors spread among Vietnamese depositors that some banks might be about to fail.
One rumor speculated the government might reissue the national currency while cutting off several zeroes, meaning the popular 100,000 dong (US$6) note would become a 100-dong note.
The Vietnamese newspaper People’s Police yesterday quoted State Bank governor Nguyen Van Giau saying the rumors were groundless and “people shouldn’t panic.”
An inflation rate that topped 25 percent and a trade deficit that rose to US$14 billion through last month dented investors confidence.
This led to worries of a currency crisis or failure of some banks. Stock market and real estate bubbles have also popped in recent months.
Adam McCarty, chief economist at Mekong Economics in Hanoi, said there was reason to believe some Vietnamese banks might fail, but not large or well-established ones.
“What we’re talking about here is mainly the smaller and newer joint stock banks that were opened up in the last few years, that got heavily involved in real estate and the stock exchange,” he said.
“All of them are having trouble now because there’s a credit squeeze, and some of them might go to the wall, but then they probably deserve to,” McCarty said.
In response to the State Bank’s higher prime interest rate, Vietnamese banks such as Oceanbank and SEABank have raised deposit interest rates to more than 18 percent for deposits of a minimum of twelve months.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by