1% USD appreciation can cause $12M loss annually, says Vietnam Airlines chairman

At a conference Thursday, Dang Ngoc Hoa, chairman of Vietnam Airlines, said even a 1% increase in the dollar-dong exchange rate could lead to a VND300 billion (US$12.1 million) annual loss for the carrier, he said.

Le Manh Hung, chairman of oil and gas giant Petrovietnam, expressed similar concerns and urged the State Bank of Vietnam to keep the exchange rate steady.

But some exporters wanted the dong to weaken even further.

Le Tien Truong, chairman of garment giant Vinatex, said many major garment producers like China, India, Bangladesh, and Turkey have kept their currencies weak to promote exports.

They have fallen 11-50% against the dollar in the last two years, making Vietnam’s products 15% more expensive in comparison, he said.

"We [exporters] do not know how much the dong should be devalued, but 5% is not enough to prop up exports."

The exchange rate was one of the reasons garment exports fell by 10% in the last two years, he added.

In the year to date the dollar has appreciated by 1.8% officially and 3.75% on the black market.

While it has been steady at banks the last few days, it continued to rise on the street and hit a record VND25,700.

Since Monday the central bank has been selling bonds, mopping up nearly VND30,000 trillion from banks, in an effort to strengthen the dong.