News Bulletin 73 - Week 4, July 2021

Vietnam has in the past week entered its most difficult period of Covid-19, with numbers of Covid cases increasing in record numbers. Even as the country’s commercial hub remains the country’s pandemic hotspot, Hanoi also entered its own lockdown even as it only re-opened three weeks prior.

On a more encouraging note, Việt Nam was named among the world’s top 20 host economies for foreign direct investment (FDI) for the first time in 2020 with an inflow of US$16 billion.  The country was up five places against last year’s ranking to reach 19th on the list, according to UN Conference on Trade and Development (UNCTAD)’s World Investment Report 2021.

Also last week, Vietnam and US came to an agreement that will end America’s currency case against Vietnam.  Vietnam has pledged not to deliberately weaken its dong currency, satisfying the U.S. Treasury’s demand that Vietnam make its monetary and exchange rate policies more transparent.

The past week highlight:

U.S. Removes Vietnam Tariff Threat After Currency-Dispute Truce

The U.S. revoked the threat of tariffs on Vietnamese goods after the two nations reached an agreement under which the Asian nation will allow more flexibility in its currency.

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Let’s look at some other related financial and business news during the past week

1. Việt Nam named among world’s top 20 host economies for FDI for the first time

Though FDI commitments to Việt Nam declined by 2 per cent last year, Việt Nam is in the world’s top 20 host economies for foreign direct investment (FDI) for the first time.

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2. ADB cuts Vietnam growth forecast on Covid resurgence

The Asian Development Bank has cut its 2021 growth forecast for Vietnam from 6.7 percent to 5.8 percent as the fourth wave of Covid-19 hampers recovery.

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3. HCMC to reopen groceries markets with pandemic arrangements

HCMC has approved a new market model that will have 12 stalls selling essential goods, following all pandemic-related safety measures including distancing and health declarations.

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4. Banks set conditions to lower interest rates

The recent news by several Commercial Banks to lower lending interest rates can be considered good for businesses in particular and the economy in general. However, lowering loan interest rates is difficult to achieve.

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5. Grab, Gojek… suspend food delivery in Hanoi

Tech-based transport firms like Grab, Now, Be, Gojek and BEAMIN have stopped food delivery and ride-hailing services in Hanoi starting Saturday as the city imposes 15-day social distancing.

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6. Vietnam pledges not to devalue currency in agreement with U.S. Treasury

Vietnam has pledged not to deliberately weaken its dong currency to gain an export advantage, reaching an agreement with the U.S. Treasury to refrain from "competitive devaluation" and make its monetary and exchange rate policies more transparent.

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7. Vietnam in talks with U.S. for local production of COVID-19 mRNA vaccine

Vietnam is in talks with the United States on domestic production of mRNA vaccines, its foreign ministry said on Thursday, as the country looks to boost supplies amid its worst coronavirus outbreak yet.

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8. Banks seek alternate sources for liquidity

During the first half of the year the economy was showing signs of recovery, which helped credit institutions to grow strongly once again.

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9. Covid cloud to cast H2 shadow over labor market

The strongest Covid-19 wave to hit Vietnam will influence many enterprises to postpone or limit their recruitment plans, employment agencies report.

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10. Why Vietnam’s stock market struggled to find direction last week?

Việt Nam’s stock market struggled to find direction last week as liquidity fell continuously and foreign investors net sold a value of more than VNĐ2.22 trillion (US$96.6 million), causing analysts from securities firms to have cautious views of the market this week.

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