Trade shortfall held at $1.4 bln in April

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Vietnam's trade deficit in April remained at almost the same level as the previous month, sustaining pressure on the nation to halt a depletion in foreign reserves and stabilize the dong.

The deficit in April totaled US$1.4 billion compared with a revised $1.41 billion in March, based on preliminary figures released by the General Statistics Office in Hanoi on Wednesday.

The gap was about $4.9 billion for the four months through April, up from $4.81 billion in the same period a year earlier, according to calculations by Bloomberg News based on data from the agency.

Vietnam devalued the dong for the fourth time in 15 months on February 11 to curb the deficit amid concerns that funding the shortfall is eroding the government's holdings of foreign currency.

The reserves declined 46 percent to $12.4 billion at the end of last year from 2008, World Bank data shows, with quickening inflation also spurring domestic demand for dollars.

"With very low import cover and foreign-exchange reserves, Vietnam just can't afford to keep running large trade and current-account deficits," Ashok Bhundia, a fixed-income strategist at Bank of America Merrill Lynch in Hong Kong, said before the release. "But by the second half of this year, we should be seeing improvements in trade numbers, as a result of a hard landing in growth."

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