Vietnam Business & Weather Briefing (July 31): Lending Rates to Stay Stable Due to State Support

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Business Briefing

Export news: Tuna exports predicted to surge amid high inflation

The demand for tuna in foreign markets amid the strong rise in prices of other foodstuff is predicted to lead to a surge in tuna export volume and value of Vietnam, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). The association reported that in the first six months of this year, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries, the third largest market of Vietnamese tuna after the US and Europe, imported 68 million USD worth of the fish from Vietnam, a 50% rise over the same period last year.

In addition, VASEP said the US Department of Agriculture has announced that the US faced the highest inflation in the past 40 years, with foodstuff prices increasing by 19% compared to the average level in the past 10 years, including that of chicken, a popular cheap protein source in the US.

Meanwhile, the price of chicken and poultry meat in the US is forecast to continue to increase from 15% to 18% in 2022. VASEP held that when the prices of cheap protein foodstuff increase, tuna could be a good alternative for US consumers. Therefore, the association held that Vietnamese tuna is enjoying more opportunities in such markets.

This year, tuna export turnover is expected to reach about 1.1 billion USD, up 45% from the previous year, considering a 56% growth in the first six months of the year. Tuna export turnover in June reached 90 million USD, a year-on-year increase of 41%, bringing the value for the first half of the year to 553 million USD, a year-on-year rise of 56%. Regarding markets, VASEP said that good growth was seen in most major markets except the EU, Israel, and Egypt.

As of the end of June, tuna export value to the US totaled more than 300 million USD, up 96% over the same period last year. Besides the three major export markets, tuna exports to Saudi Arabia, Thailand, the Philippines, and Russia also increased. VASEP forecasts that tuna exports in the second half of the year will continue to grow well, but at a slower rate, according to VNA.

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Finance news: Lending rates expected to be stable thanks to State support package

Lending interest rates in the remaining months of this year will stay relatively stable to help firms recover production after the pandemic. This is thanks to the 2-per-cent interest rate support package and banks’ measures to cut input costs, according to Dr. Hoang Van Cuong, vice president of the National Economics University. The Government May this year issued Decree No. 31/2022/NĐ-CP on interest rate support from the State budget for loans of enterprises.

Recently, Saigon-Hanoi Commercial Joint Stock Bank (SHB) announced it would spend VND710 billion to directly reduce loan interest rates by 2 percent per year for qualified firms, cooperatives, and household customers according to Decree 31. Previously, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam Bank for Agriculture and Rural Development (Agribank), and Orient Commercial Joint Stock Bank (OCB) were the first banks to announce the implementation of the interest rate support package.

As Vietnam’s inflation in the first half of this year was well controlled at 2.24 percent and the amount of money supplied to the economy over the past years was not much, Cuong said it is necessary to expand the credit quota for banks so that they can boost lending and firms can access the interest support package. The 2 percent interest rate support package therefore can really aid firms and have a positive impact on the economy, said.

Besides the package, banks have been also forced to take measures to save input costs and better manage loans to reduce risk provisions, so as to cut lending interest rates as directed by the SBV. Currently, some banks are also applying preferential interest rates of about 6.7-8.1 percent per year for 60-180 month business loans.

At Bank for Investment and Development of Vietnam (BIDV), for example, a preferential interest rate of 6.7-7.5 percent per year is listed for business loans while the rate at Joint Stock Commercial Bank for Industry and Trade of Vietnam (VietinBank), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and Tien Phong Commercial Joint Stock Bank (TPBank) is 7-8.1 percent, 7.5 percent and 6.8 percent per year, respectively.

The preferential rates will be applied in the first 6, 12 and 24 months, or even up to 7-10 years, depending on each credit package of each bank. At the end of the preferential period, the interest rate will be floated according to the market’s interest rates. Saigon Securities Incorporation (SSI) forecast the SBV will expand the credit quota for some banks in the third quarter of this year and the move will cause the deposit interest rate to rise by 50-70 basis points.

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Aviation news: Vietnam Airlines launches online check-in at Sydney and Melbourne

National flag carrier Vietnam Airlines will continue to deploy online check-in services for passengers departing from Sydney and Melbourne airports in Australia as of August 1. Passengers who are able to successfully check in online with checked baggage are still required to go to the online check-in counter in order to verify their boarding pass and identity documents.

Following the implementation of the online check-in service at Sydney and Melbourne airports, Vietnam Airlines has been able to increase the total number of airports applying online check-in service to 16 domestic airports and 30 international airports. Simultaneously, the carrier is anticipated to deploy a convenient service throughout the airport network with the primary aim of becoming a digital airline. Passengers will be able to save time by self-check-in online via www.vietnamairlines.com or through the Vietnam Airlines mobile app between 24 hours and one hour before the scheduled departure time.

This comes after Vietnam Airlines had previously introduced an online check-in service for passengers departing from London Heathrow international airports in the UK, Frankfurt in Germany, Moscow in Russia, Tokyo Narita, Tokyo Haneda, Osaka Kansai, Nagoya, and Fukuoka in Japan, as well as Seoul and Busan in the Republic of Korea. This is in addition to Guangzhou, Shanghai, Chengdu, Beijing, Hong Kong, and Hangzhou in China, Taipei and Kaohsiung in Taiwan (China), Singapore, Bangkok in Thailand, Kuala Lumpur in Malaysia, Yangon in Myanmar, Jakarta and Bali in Indonesia, Siem Reap and Phnom Penh in Cambodia, as well as Luang Prabang and Vientiane in Laos, according to Vietnamnet.

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Weather Forecast

Northern region: There will be showers and scattered thunderstorms in early August. The mountainous and midland areas will have moderate to heavy rain with thunderstorms.

Central region: There will be scattered showers and thunderstorms in the evening, with heavy rain in early August.

Central Highlands and Southern provinces: From August 1 to 4, there will be rain and thunderstorm in the afternoon and evening, During thunderstorms, there is a possibility of tornadoes, lightning, hail, and strong winds.