The recent macroeconomic report of HCM City University of Banking showed that the Foreign Direct Investment (FDI) poured in Vietnam every year is an important supply for the foreign exchange reserves accumulation, contributing to create a new record for the foreign exchange reserves of 68 billion US dollars by the end of June 2019.
The abundance of foreign exchange reserves is an essential resource for the State Bank of Vietnam (SBV) to manage the exchange rate stably.
Nevertheless, the report also predicts challenges that Vietnam may face in the near future, that is the US China trade war which is currently stressful and unpredictable, significantly affecting the global economic activities.
The decline of total global demand was an inevitable response when risk factors increase. The export activities of Vietnam were immediately affected when the export growth in the first six months of the year was only 7.3 percent, much lower than the 17.8 percent recorded in the same period of 2018.
As a result, the trade deficit has returned at a value of 37 million US dollars, while it was a surplus of 4.12 billion US dollars a year ago. After the first six months of 2019, the exports of domestic economic sectors increased by 10.8 percent, not enough to pull up the exports of the whole economy, because the exports of FDI sector only increased by 5.9 percent. Notably, the trade surplus of FDI sector has played an important role to offset the trade deficit from the domestic economic sectors for many years.
