Vietnam says nearly $4 billion added to foreign reserves

TN News

Email Print

Vietnam, which is battling high inflation and other economic problems, has added nearly $4 billion this year to its foreign reserves, a government report on Thursday said.

The State Bank of Vietnam will further increase reserves by the end of 2011, the report to the National Assembly by Deputy Prime Minister Nguyen Sinh Hung said, without giving the current level of reserves.

According to the Asian Development Bank, Vietnam's foreign reserves were $12.4 billion at the end of 2010.

In recent years, Vietnam's reserves have declined.

The thinning foreign reserves and a trade deficit each month since April 2009 have put pressure on the domestic currency, the dong, while the economy also struggles with inflation, funding shortages, falling foreign investment, the government has said.

Vietnam's trade deficit this year will widen to between $14 billion and $14.5 billion, up more than 10 percent from 2010, despite stronger-than-expected growth in export revenues, the government has said.

Stricter measures

On Thursday, a parliament official said the government should take stricter measures to cut the trade deficit.

Ha Van Hien, head of the assembly's Economic Committee said at the body's opening session that "The trade deficit, the main factor to insure national foreign currency balance and stabilize foreign exchange, has yet to be essentially improved."

Hung, the deputy prime minister, told the parliament Vietnam will change tax policy to limit the imports of consumer goods to help cut the trade deficit.

The government would also monitor the import of material, equipment, goods by state-owned companies using state budget and proceeds from government bonds, he said.

Hien urged the government to issue a list of import restricted goods and limit the imports of unnecessary goods.

"If not well controlled, the trade deficit will be large and the foreign exchange rate will be under great pressure at the end of the year," he said.

Exports between January and June reached $43.06 billion, up 32.6 percent from a year before, and imports in the period rose 27.1 percent to $49.5 billion, customs data showed earlier this week.

The deficit with China accounted for 82 percent of the total trade gap in the first five months of 2011.

More Business News