Hanoi says exports at risk from turmoil

Hanoi says exports at risk from turmoil

HANOI (Reuter): Vietnam's central bank governor has called for measures to protect domestic goods from regional competition in the wake of Southeast Asia's currency turmoil, state media reported yesterday.

The English-language Vietnam News quoted Cao Si Kiem as telling local reporters at a news conference that the State Bank of Vietnam's exchange rate policy and controls on the use of foreign currency had spared Vietnam from the problems afflicting some of its neighbors.

But he said Vietnam's trade activities would be affected as a result of competition from cheaper regional produce, and added that steps were needed to "stem imports of unnecessary foreign goods and promote exports".

Vietnam's currency, the dong, has not been directly affected by the region's financial crisis which has trimmed the value of several other Asian currencies, particularly the Thai baht.

However, the chaos and its resulting impact on Vietnam's exports, particularly rice, has put increased pressure on the state bank to speed the depreciation of the dong.

Kiem said the central bank had petitioned the government to introduce policies aimed at encouraging exporters to buy goods direct from producers, and establish rules to minimize the import of luxury goods.

Further efforts should also be introduced to halt illegal imports and smuggling, he said.