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Today, Vietnam VN30 index fell again 2.7% . Judging from the current decline pattern, it will continue to fall this afternoon. This is after the decline of 4% all day last Friday, and continued to fall sharply.
Half a year ago, Vietnam's index was still at the 1550, but now it has fallen below 1000 point, and it will soon fall below 980. In just half a year, the decline has reached 27% .
In addition to the sharp decline in the stock market in the past six months, Vietnamese Dong 's exchange rate also showed a significant decline.
In order to cope with the crisis that is already in front of us, Vietnam has raised interest rates in 1004 basis points in recent days, but it still cannot prevent the decline in the exchange rate.
Since the probability of the Federal Reserve hike rate hike in 11754 basis points has reached 93%, there is almost no suspense, so it can be expected that in the future, the rate hike of the central bank of Vietnam will be more radical.
Perhaps by the first quarter of next year, Vietnam's interest rate will reach 6.8% , but even so, overseas funds are still quickly withdrawing from Vietnam's financial market. In the past six months, the assets held by foreign investors have been sold off at least 1260 trillion dong, which is more than five times that of last year.
exchange rate depreciation, what impact will the funds flee on Vietnam?
's biggest problem is debt.
Official data from Vietnam shows that in September this year, Vietnam's foreign debt accumulated to 175000 million US dollars, equivalent to 1.7 times the foreign exchange reserve .
So, Vietnam's economy has developed well in the past two years, and Vietnam's manufacturing industry has also attracted many production lines that were originally settled in mainland China, but this development process comes more from the support of foreign debt.
As the exchange rate of the Vietnamese Dong continues to fall, the US dollar exchange rate has risen to a new high in 20 years ago, the cost of Vietnam in repaying foreign debts in the future is getting greater and greater.
But in the past six months, Vietnam has begun to continuously sell its US bonds , and through the method of constantly buying Vietnamese dong, hoping to stabilize Vietnam's exchange rate.
is very similar to other Asian countries. In the past, Vietnam's products were sold to Western countries, especially the United States, and exchanged a large amount of US dollars, so they bought the US dollar in their hands to US Treasury bonds. This also caused the problem of excessive U.S. debt in Vietnam's foreign reserves.
However, since the beginning of this year, with the continuous decline in US bond prices, the risks of US bonds are becoming increasingly greater. At the same time, Vietnam also needs the US dollar to maintain the exchange rate, so Vietnam has also invested in the army selling US bonds.
The yield of US bonds has been below 1.5% at the beginning of the year, and has now completely broken through 4% , indicating that the price of US bonds is constantly falling. From this perspective, Vietnam's early selling of US bonds has at least partially reduced its depreciation.
However, currently, Vietnam holds US debts below 40000 US$400 million, but it still accounts for more than 30% of the foreign exchange reserves. Therefore, Vietnam will accelerate its de-dollarization in the future.
Recently, the Vietnamese economics community is increasingly inclined to recommend purchasing RMB assets and expanding the scope of using RMB in the future.
At present, there are many provinces in Vietnam, and RMB can be used to settle goods and services. At the border with China, the RMB has long become one of the main currencies used by the people in daily life, and its usage rate exceeds all other foreign currencies.
From this perspective, Vietnam has a very good foundation, and the security and stability of the RMB are also one of the important choices for Vietnam and de-dollarization.
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