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Vietnam’s forex reserves estimated at $19-20 bln

The foreign exchange reserves of Vietnam have improved significantly, equivalent to the payments for 9 weeks of imports from about 7.5 weeks as of mid-2011, said the government in a recent report.

But the government did not give the specific figure of the country’s forex reserves in the latest socioeconomic report 2011 submitted to the Standing Committee of the National Assembly late last week.

The current forex reserves may range from $19-$20 billion, newswires Vneconomy and Dan Tri quoted some experts, citing the government’s socioeconomic report.

However, according to the International Monetary Fund (IMF) norm, the scale of foreign exchange reserves should reach between 12-14 weeks of imports to be regarded as sufficient.

The norm for the safe rate of forex reserves of the World Bank is 10 weeks.

Earlier, Asian Development Bank (ADB)’s report estimated that the country had nearly $17 billion in foreign currency reserves, equaling to about two months of imports.

The reserves rose by around 25 percent over late 2011 following the active move of the central bank to buy foreign currencies, said ADB.

The State Bank of Vietnam early this month announced that it had used around VND130 trillion to buy $6.23 billion worth of foreign currencies from banking system for the national reserve in the first 3 months of 2012.

The reserves rose by $3.5 billion compared to the rate the ADB announced in mid-2011, said ADB expert Dominic Mellor.

At the Consultative Group’s meeting in June 2011, Nguyen Sinh Hung, then chairman of the country’s National Assembly, said the country targeted to increase its forex reserves to 16 weeks of imports in 2012.

The report also said that in Q1/2012, Vietnam’s international current account balance had positive signs. The country enjoyed a current account surplus of nearly $2 billion this year while it suffered a deficit of $126 million in the same period last year.

The country’s total export turnover in the first 3 months of 2012 continued to reach high growth rate with an estimate of over $24.8 billion, rising 25 percent year on year.
The total import spending in Q1/2012 is estimated at about $24.58 billion, rising 6.1 percent on year.

Thus, in Q1/2012, the country ran a trade surplus of $220 million, equaling to about 0.9 percent of the total export turnover, the best results versus the same period of recent years.

In Q1/2011, the country posted a trade deficit of $3 billion.

However, the report also said that the trade surplus was attributed to not only increasing exports and low imports but also to the declines in investments and processing industry production, resulting in the fall in the country’s demand for importing raw materials, machineries and equipment. – Tuoitre

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