Economists dish on exchange rate adjustments

The move has been welcomed by Vietnamese exporters, and a number of economists have forecast that the country’s macro-economic indicators will not experience much fluctuation.

For Vietnamese producers who pay for imported materials in US dollars, exchange rate adjustments have raised their production costs and in turn, selling prices. These sectors include dairy production, food, animal feed, and plastic. However, the increase is said to have minimal impact on key macro-economic indicators.

Regarding the public debt, economists say that as the US dollar becomes more expensive, Vietnam’s USD-denominated public debt will rise in value. However, this should not be too big of a concern, since a large proportion of Vietnam’s debts are in Japanese Yen and euros.

The key, experts say, is that Vietnamese enterprises should take this chance to adjust their strategies and become more competitive.

Some economic reports have further shown that the devaluations of the yuan and the dong are at comparable rates. So their impacts on Vietnam’s trade deficit with China will not be too drastic.