Vietnam’s stock market suffered its biggest drop in seven months after the State Bank raised the benchmark interest rate and devalued the currency.
The State Bank on Wednesday raised the prime interest rate from 7 percent to 8 percent, effective next Tuesday.
The central bank also raised the reference trading rate of the Vietnamese dong by 5.4 percent, to 17,961 dong to the US dollar.
At the same time, it narrowed the band within which commercial banks are allowed to trade the dong from 5 percent to 3 percent on either side of the reference rate. The actual exchange rates offered by banks rose 3.3 percent, from 17,886 to 18,500 dong to the dollar as of yesterday.
The VN-Index ended on Wednesday down 4.1 percent, at 482.6 points, the lowest level since Sept. 7.
Traders yesterday were “as panicked as early last year, when the Vietnamese and global economy went into crisis,” said Dao Viet Anh, an analyst at FPT Securities in Hanoi. “This psychology will continue, so I think the market will be down in the coming days.”
“Many traders had the same thought I did, that when the 500-point psychological support level was breached on Thursday, the market was sure to drop further,” FPT Securities trader Nguyen Khai said.
Nguyen Thu Huong, a trader at Kim Long Securities, said traders were also influenced by bad news from Vietnam’s General Statistics Office (GSO).
The GSO announced the inflation rate for this month had been 0.55 percent, up from 0.37 percent last month.
The Vietnam Economics Times yesterday warned the country was likely to return to high inflation. The paper noted the rising consumer price index, a trade deficit likely to hit US$12.5 billion this year, a shortage of dollars in the economy, and the government’s continued loose credit policies.
Vietnam’s stock market lost 65 percent of its value last year, with the VnIndex falling to just 235 points. It had increased to 640 points at its peak on Nov. 22.
The Central Weather Administration (CWA) yesterday said it expected to issue a sea warning for Typhoon Fung-Wong tomorrow, which it said would possibly make landfall near central Taiwan. As of 2am yesterday, Fung-Wong was about 1,760km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, moving west-northwest at 26kph. It is forecast to reach Luzon in the northern Philippines by tomorrow, the CWA said. After entering the South China Sea, Typhoon Fung-Wong is likely to turn northward toward Taiwan, CWA forecaster Chang Chun-yao (張峻堯) said, adding that it would likely make landfall near central Taiwan. The CWA expects to issue a land
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PREPARATION: Ferry lines and flights were canceled ahead of only the second storm to hit the nation in November, while many areas canceled classes and work Authorities yesterday evacuated more than 3,000 people ahead of approaching Tropical Storm Fung-wong, which is expected to make landfall between Kaohsiung and Pingtung County this evening. Fung-wong was yesterday morning downgraded from a typhoon to a tropical storm as it approached the nation’s southwest coast, the Central Weather Administration (CWA) said, as it issued a land alert for the storm. The alert applies to residents in Tainan, Kaohsiung, Pingtung and Taitung counties, and the Hengchun Peninsula (恆春). As of press time last night, Taichung, Tainan, Kaohsiung, and Yilan, Miaoli, Changhua, Yunlin, Pingtung and Penghu counties, as well as Chiayi city and county had
The Central Weather Administration (CWA) yesterday issued a sea alert for Typhoon Fung-wong (鳳凰) as it threatened vessels operating in waters off the Pratas Islands (Dongsha Islands, 東沙群島), the Bashi Channel and south of the Taiwan Strait. A land alert is expected to be announced some time between late last night and early this morning, the CWA said. As of press time last night, Taoyuan, as well as Yilan, Hualien and Penghu counties had declared today a typhoon day, canceling work and classes. Except for a few select districts in Taipei and New Taipei City, all other areas and city
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