Giay Hue company specialises in producing fabric for domestic garment and textile companies. So far, companies like this have yet to be affected by the currency exchanges. However, experts say they will suffer losses in the future as almost all materials for the industry are imported from China.
Meanwhile, losses have been seen clearly in export companies. This paper material manufacturing company shipped 150 thousand tonnes of its product to Japan for more than 10 million USD in the first half of this year. As the transacted currency is US dollar, the changes have affected its earnings.
Bui Phi Yen, Deputy Director of Giay Hue Co., Ltd, said: "Our revenue is denominated in US dollars so we borrow money and repay banks in USD. The increasing exchange rate between the Vietnamese dong and US dollar will increase our costs. If the exchange rate keeps going up, it will be difficult for us to raise capital in both USD and Vietnamese dong".
While waiting for more support measures from the authorities, local exporters should take initiative in coping with the challenges some business people have said.
Experts say in order to cope with the adjustment in currency rates, businesses should enhance their own competitive edge apart from relying on the government.
For exporters, they should consider applying new technology, accessing new markets and finding new sources of materials and choosing strong currencies when it comes to payments for their long term plans.
