Exchange rate fears dent trading confidence

TN News

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Vietnamese traders are slightly less confident in their business prospects for the next six months than they were toward the end of last year, according to the latest HSBC survey.

They attribute the dip in confidence to fluctuating exchange rates and high interest rates.

The semi-annual HSBC Trade Confidence Index report, released on Tuesday, shows that although importers and exporters in Vietnam are still optimistic about the general trade outlook and expect trading volumes to grow, they are worried about the challenges that lie ahead.

In terms of traders' confidence, Vietnam scored 116, six points below the second half of last year. It was the second decline after the country peaked at 132 points for the first six months of 2010.

HSBC said that 81 percent of traders considered exchange rate volatility the most difficult variable in expanding their trading business. That compared to 74 percent in the previous survey. The US dollar remained the most preferred trade settlement currency in the next six months for Vietnamese traders, while most traders in the world expect Chinese yuan to be among the top three trade currencies in 2011, the report said.

Rising interest rates were the second most worrying factor for traders, with 51 percent listing it among the top barriers for trade growth in Vietnam.

Around the world, global trade confidence is still positive despite inflation, the HSBC report said. It noted that the global trade confidence index held steady at 114 in the first half of 2011, compared to 116 in the second half of 2010.

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