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Thursday, May 10, 2018

KTFA UPDATE, 10 MAY

Samson:  Vietnam : Transaction value via ATM/POS surges 34%

9th May, 2018

The value of transactions via POS rose by 27 per cent to more than VNĐ318 trillion by the end of last year

The total value of transactions via the automatic teller machines (ATMs) and points of sale (POS) last year surged sharply by 34 per cent against the previous year.

The State Bank of Việt Nam (SBV) reported at a forum on the sustained growth of the banking industry, held in Hà Nội on Tuesday.

By the end of last year, Việt Nam had some 17,558 ATM and 268,813 POS, a year-on-year increase of 10 per cent.

The value of transactions via POS rose by 27 per cent to more than VNĐ318 trillion (US$13.95 billion), while the number of transactions surged sharply by 40 per cent to nearly 136 million.
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The ratio of cash withdrawal at ATMs declined to 6.86 per cent late last year against 15.71 per cent in 2016.

Director of SBV’s Payment Department Phạm Tiến Dũng said that payments via internet and mobile phones last year soared by more than 50 per cent, while inter-bank transactions also witnessed a strong growth at 30 per cent, both in volume and value, with a daily transaction revenue of some $10 billion.

Dũng attributed the rise to the banking industry’s efforts to apply technological advances in the fourth industrial revolution to develop payment infrastructure, and enhance payment security and safety in recent years.

The SBV has also focused on streamlining legal framework and applying technologies in non-cash payment besides promoting management and supervision in payment.

Besides this, commercial banks have integrated more functions on payment, so that customers can pay for all kinds of bills, from water, electricity and telephone to insurance and transport fee through their bank accounts.

The SBV has so far implemented a plan to develop card payment using card readers at POS and mobile points of sale (mPOS) from 2017 to 2020, which is aimed at boosting the non-cash payment method in Việt Nam, as approved in Decision 2545/QĐ-TTg by the Prime Minister.

Accordingly, the ratio of cash to total payment instruments will be below 10 per cent by the end of 2020, when the whole market will have more than 300,000 card readers installed at POS to process some 200 million transactions every year.   LINK

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Samson:  Vietnam's foreign reserves reach record high of US$63b

 7th May, 2018

SBV has bought in $32 billion worth of hard currencies in the past more than two years

State Bank of Việt Nam (SBV) has continuously bought in hard currencies in the past few months, raising the country’s foreign reserves to a record high of US$63 billion.

Mai Tiến Dũng, Minister and Chairman of the Government Office, announced this at a recent press conference following a monthly Cabinet meeting.

SBV bought in $32 billion worth of hard currencies in the past more than two years, Dũng said.

According to experts, SBV has also changed its way of purchasing foreign currency. Instead of using spot trade, the central bank has used futures contracts for the purchase of hard currencies since February 7 this year.

Previously, the bank bought foreign currency in spot trade, with volumes reaching $1-3 billion per day, meaning that an equivalent volume of Vietnamese đồng was pumped into the market in a short time.

But since February, the bank has launched three-month futures contracts to regulate the flow in a more flexible way. Some 40 percent of the foreign reserves have been purchased through futures contracts, helping to balance cash flows to moderate the pressures on interest rates, USD/VNĐ exchange rate and inflation.

Experts attributed the stability to reasons such as SBV’s flexible central rate management mechanism, which ensured that the domestic foreign exchange market was less affected by global factors.

In addition to this, the domestic supply-demand relationship with the dollar was relatively stable thanks to foreign currency supply from exports, foreign investment, official development assistance, tourism and remittances.

The rise in the country’s foreign reserves was reported in the context of the foreign exchange rate in the domestic market being relatively stable. According to the central bank, liquidity of the domestic foreign exchange market was good and met the demands of local organisations and individuals.

On Monday, SBV set the daily reference exchange rate at VNĐ22,558 per US dollar, up VNĐ6 from the last working day of last week.

With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VNĐ23,251 per dollar and the floor rate is VNĐ21,807.

Major commercial banks of Vietcombank, BIDV and Vietinbank on Monday listed the USD/VNĐ exchange rate unchanged from last Friday, buying the greenback at VNĐ22,735 and selling it at VNĐ22,805.    LINK

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Samson: Vietnam : Credit institutions undergo drastic restructuring

 9th May, 2018

The banking industry is drastically restructuring credit institutions (CIs) in combination with bad debt settlement to ensure their safe, healthy and sustained growth.

Deputy Governor of State Bank of Việt Nam Nguyễn Kim Anh said this at a forum on the banking industry towards sustained growth, held in Hà Nội on May 8.

According to Anh, the restructuring of CIs has so far been positive with the non-performing loans (NPL) ratio of the entire banking system being kept at below 3 per cent.

To ensure the sustained growth of the banking industry, SBV will soon finalise the appraisal and approval of CIs’ restructuring plans besides closely supervising the operation of CIs, especially ailing ones, to timely take actions.

The central bank has so far approved the restructuring plans of most banks. However, the restructuring plans of financial companies and financial leasing companies are still being prepared.

As for State-owned commercial banks, the restructuring would focus on enhancing the banks’ financial status after their restructuring plans are approved by the Prime Minister, Anh said, adding that according to a decision issued last year the on restructuring CIs in combination with NPL settlements for 2016-20, State-owned banks must improve their charter capital to meet Basel standards.

SBV’s Deputy Chief Inspector Phạm Huyền Anh said the central bank would also resolutely deal with the cross ownership and violation of the limit regulation on ownership of shares at banks to avoid group interests, which could cause damage to the entire banking system.

Solutions on trading NPLs according to the market mechanism would also be implemented together with measures to control risks of the trading method, Anh said.

As for monetary management policy, Nguyễn Thanh Hà, director of SBV’s Monetary Policy Department, said the central bank this year would continue to manage the monetary policy actively and flexibly in order to better control inflation and support economic growth.

He did say however that there should be a close co-operation between monetary and fiscal policies and the State’s price management mechanism in order to make the policies effective, as inflation is under pressure owing to global price volatility, price hikes of goods managed by the State, and high growth of local consumption demands and securities markets.

Moreover, the rising inflows of foreign direct investment, foreign indirect investment capital and divestment of State-owned enterprises would hit the central bank hard this year, and provide a challenge to balance cash flows to moderate the pressures on inflation, interest rates, and the USD/VNĐ exchange rate, he said.

At the forum, experts praised SBV’s handling of monetary management policy in recent years, noting it had helped stabilise the macroeconomy, support economic growth, and create confidence among investors.

The experts suggested the central bank continue to apply the current stable and flexible monetary management policy as it was suitable and effective.

According to Nguyễn Xuân Thành, director of Fulbright University Vietnam, the monetary management policy is operating so well that the central bank should not loosen it.

SBV had to do so a year ago to support economic growth, which reached only over five per cent in the first quarter of 2017, Thành said, adding that the country’s gross domestic product (GDP) growth last year was supported significantly by the monetary policy.

However, the policy should not loosen this year as the GDP rate was good in the beginning of the year, with positive signals in domestic demands and exports as well as in manufacturing and processing, Thành added.   LINK
Samson:  Vietnam : HCM City to host VN-Middle East trade forum

 9th May, 2018

A Việt Nam-Middle East Trade Forum to be held in HCM City on Friday is expected to help boost trade between the two sides.

Organised by the Việt Nam Chamber of Commerce and Industry, MIG Holding and RELAM Investment-Dubai, the forum will see the UAE ambassador, the Vietnamese ambassador to the UAE, and leaders of HCM City, the Ministry of Industry and Trade, business groups and businesses in the two countries.

The forum will introduce the business and investment environment in Việt Nam and the UAE and explore co-operation opportunities between businesses in various sectors, including investment, industry, agriculture, telecommunications, fisheries, construction, and building materials.

Businesses will sign agreements at the forum.

According to the organisers, the forum is a very important event amid Việt Nam’s plans to strengthen relations with Middle Eastern and African countries in 2016-25.   LINK

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Samson:  Việt Nam rolls out red carpet for Chinese investors: Ambassador

 9th May, 2018

Representatives of Việt Nam and China signed co-operation agreements at the conference in China’s Chongqing city

The Vietnamese Government always welcomes and commits to creating conditions for foreign businesses, including those from China’s Chongqing city, to land investment in high-tech projects in the country, said Vietnamese Ambassador to China Đặng Minh Khôi.

At a seminar on Tuesday held by the Vietnamese Embassy in China, the Ministry of Industry and Trade of Vietnam in collaboration with Chongqing authorities, Ambassador Khoi noticed that the investors should pay more attention to protecting the environment while working to ensure labourers’ benefits and social welfare in the host nation.

Việt Nam is accelerating industrialisation and modernisation and shaking up the economy in coupled with renovating growth model, he said, adding that the country is giving priority to the development of high-tech industries, green technologies, clean energy, organic agriculture and digital economy, among others.

He expressed his hope that China will open door for the products which are of Việt Nam’s strengths and China’s demand like farm produce, pork and dairy products.

Creating favourable conditions for Vietnamese products in the custom clearance procedures is an important move to bring two-way trade into a more balanced manner, he said.

Meanwhile, Deputy Minister of Industry and Trade Trần Quốc Khánh highlighted that Việt Nam and China hold huge potential to bolster logistics cooperation.

Việt Nam’s logistics service has enjoyed strong growth with annual expansion of 20-25 per cent and according to the World Bank’s rankings, Việt Nam is 64th out of 160 countries in the world and 4th in ASEAN after Singapore, Malaysia and Thailand in logistics development.

The 1,400 kilometre freight train service between Hà Nội and Chongqing will open opportunities for both sides to collaborate in the logistics sector, he said, adding that it is an effective channel to transport goods, including tropical fruit, farm produce and seafood, between Việt Nam and China’s localities.

For his part, deputy mayor of Chongqing city Liu Guiping said that multi-model transportation, cross-border road transport and international railways are three main types of transportation, which help connecting Chongqing and China’s western localities with Việt Nam and other ASEAN nations.

He wished that enterprises from both nations will work to promote cooperation in the field.

At the seminar, Vietnam Logistics Business Association and the trade office of Chongqing city inked an agreement on enhancing logistics cooperation. Enterprises from both sides signed their agreements and specific cooperation programmes in the coming time.

In addition, more than 200 firms met to seek linkages in economy, trade and logistics on this occasion.   LINK

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