Vietnam Aug trade deficit hits $900 mln: gov't

TN News

Email Print

Vietnam, which devalued its currency last week, estimates its trade deficit would stay below US$1 billion for a fourth consecutive month.

The government on Tuesday estimated the trade deficit in August was $900 million, and revised July's figure to $978 million from $1.15 billion.

The monthly announcement of imports and exports comes less than a week after the central bank devalued the currency in a move it said was aimed at helping control the trade deficit, which has put pressure on the dong for months.

Exports surged 27.7 percent in August compared to the same month last year to $6.0 billion, while imports rose 11.3 percent to $6.9 billion, the statistics office said.

The year-to-date trade deficit, which stood at $8.16 billion, according to the statistics office, was "more than covered" by structural flows, said Prakriti Sofat, an economist following Vietnam at Barclays Capital in Singapore.

"Overall, we continue to expect the balance of payments to post a surplus, allowing the country to build FX reserves," she said.

Last Wednesday, the central bank devalued the dong's midpoint by 2 percent against the dollar in a move it said it took to help control the trade deficit. The trading band of 3 percent on either side of that rate was maintained.

After the devaluation, the dong quickly slipped to the weak end of its trading band against the dollar.

In a research note after the devaluation, ANZ noted that the outlook for exports "remains challenging with global growth set to moderate" in the second half of the year.

More Business News