Major Vietnamese firms call for stable exchange rate

Major Vietnamese companies, including energy giant Petrovietnam, real estate developer Sun Group and national carrier Vietnam Airline, have asked the central bank to keep the VND/USD rate stable amidst global financial turbulence.

Speaking at a Thursday conference on monetary policy management and growth-bolstering measures in Hanoi, Le Manh Hung, chairman of Petrovietnam, lauded the State Bank of Vietnam (SBV)’s recent efforts to keep interest rates, inflation, and the USD/VND rate steady.

The group and its subsidiaries have a combined VND240 trillion ($9.7 billion) in outstanding loans. If the average interest rate rose by one percentage point, their financial costs would rise VND2.4 trillion ($97 million) per year, Hung said.

He said Petrovietnam was in talks with banks to restructure the loans by replacing them with new ones with lower rates. The group has already done this successfully with loans of Nghi Son Refinery and Petrochemical LLC, which runs the namesake oil refinery. This was possible thanks to Prime Minister Pham Minh Chinh’s direction, Hung said.

The oil and gas group now has $1.55 billion in foreign currency-denominated loans. Therefore, any forex rate fluctuation would exert great impact on its operations.

“The SBV has managed to keep the USD/VND rate stable, which is very positive, helping us minimize forex volatility impacts. We very much expect the central bank to take measures to keep the rate stable in the time ahead,” Hung said.

Echoing Hung, Dang Ngoc Hoa, chairman of Vietnam Airlines, said that for each 1% depreciation of the dong, the carrier would lose VND300 billion ($12.13 million). “Vietnam Airlines very much hopes for a stable USD/VND rate, the less volatile possible.”

Dang Minh Truong, chairman of leading residential and hospitality real estate developer Sun Group, also welcomed the SBV’s recent intervention to cool the U.S. dollar’s rally.

The SBV resumed sale of 28-day T-bills Monday after a four-month hiatus to partly squeeze excess liquidity in the banking system, aiming to raise the interbank market VND interest rate and limit USD appreciation.

In contrast, Vietnam National Textile & Garment Group (Vinatex) chairman Le Tien Truong complained that relative appreciation of the dong against currencies of direct competitors Turkey, Bangladesh and China had hurt the group.

Vinatex shipments have become 15% more expensive than those of other garment exporting countries in the past two years, Truong said.