BANGKOK, Nov 26 (TNA) – The devaluation of the Vietnamese dong is unlikely to majorly impact Thai exports, said Thai Finance Minister Korn Chatikavanij.
The State Bank of Vietnam (SBV) devalued the Vietnamese dong amid concern over the impact of the global slowdown on the economy.
The devaluation is a move by Vietnam to solve its internal problem, caused by the global economic downturn, particularly the ballooning current account deficit, as well as rising inflation, said Mr Korn.
Although Vietnam is Thailand’s competitor for several exports, Thai exporters will not be greatly affected especially in exporting rice, as rice from the two countries have different strains and prices.
It may have a minimal impact on Thai exporters of other goods, he conceded, and the ministry will closely monitor it.
Federation of Thai Industries (FTI) chairman Santi Vilassakdanont however argued that the dong devaluation may cause Thailand to lose its competitive edge as it must compete with Vietnam in the same markets with similar goods.
Besides the quality of goods, Thai exporters have to prepare better marketing strategies to effectively manage currency exchange.
Mr Santi also expressed concern that the devaluation of the Vietnamese currency may impact on foreign investors, who seek to invest in the region and may opt for a country with cheaper cost of production.
The State Bank of Vietnam (SBV) set the interbank exchange rate at 17,961 dong to one US dollar from Thursday, against 17,034 Wednesday, effective Thursday.
The SBV is to raise rates to 8.0 per cent from December 1 to "contribute to macroeconomic stabilisation, control inflation and maintain sustainable economic growth in 2010", according to the bank’s online statement
The Vietnamese government wants to keep its 2009 annual inflation at 7.0 per cent, after reaching 23 per cent in 2008. (TNA)
Business News : Last Update : 17:34:32 26 November 2009 (GMT+7:00)
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