Vietnam posted an unexpected trade surplus in July, which may bolster the nation's currency, even as weaker global growth crimps demand for the region's goods.
The surplus in July was $100 million, compared with a revised surplus of $361 million in June, according to preliminary figures released by the General Statistics Office in Hanoi on Thursday. The median of five forecasts in a Bloomberg News survey was for a $150 million shortfall.
A diminishing trade deficit has buoyed confidence in Vietnam's currency this year and helped boost foreign reserves. The nation's imports have grown at a slower pace as the economy expanded 4.38 percent in the first six months, down from 5.63 percent in the same period a year earlier. The monetary authority has cut interest rates for five straight months.
"A smaller trade deficit is positive for the currency," Gareth Leather, a London-based economist at Capital Economics Ltd., said before the report. "While overall, a narrower deficit is good for the economy, the fact that it is related to weak domestic demand has not necessarily been positive."
The Vietnamese dong was trading at 20,883 per dollar as of 3:10 p.m. in Hanoi Thursday. It has gained about 1 percent this year against the dollar, faring better than peers including the Thai baht and the Indonesian rupiah as Europe's deepening sovereign-debt crisis spurred outflows from emerging markets.
Imports were $9.5 billion in July compared with a revised $9.529 billion in June, the Statistics Office said today. For the first seven months of the year, purchases from abroad rose 7.3 percent to $62.991 billion.
Exports fell to $9.6 billion in July from a revised $9.89 billion in June. For the first seven months, shipments climbed 19 percent to $62.933 billion.
The trade shortfall through the first seven months of the year was $58 million, compared with about $5.8 billion at the same time a year earlier, based on the figures released today.
"Exports are doing quite well, and in spite of global demand being weak, we think they will hold up," said Leather. "Companies are looking to relocate at least some of their production outside China."