[Vnbiz] raising import taxes correlated with USD strength?

[Charles Vo]

I agree that overall dollar strength is due to much larger events than
something in Vietnam.  I am looking at the massive strength in the dollar
versus the dong in the last two months.  These orders to buy imports were
placed before the dollar surge.  The huge number of ships at Vietnam ports
filled with orders of goods to be paid with USD put a rocket ship under the
dollar vs the dong.  During the June 19th Vietnam investment conference 
call with investors, government officials continually pointed to policies 
put into place that will lower the number of imported goods coming into the
country which in turn will put less pressure on dollar supply.  I think the
import taxes exacerbated an already tense situation with inflation forcing
people to hoard goods.  It accelerated the demand for imported goods which in turn will translated into many importers buying way more goods on credit
than they needed.  Importers lining up en masse to trade dong for dollars 
to pay for their goods definitely impacted the real/black market exchange 
rate.

Why do I think many of these importers will go out of business?  They paid 
a lot for their goods especially with the dollar price, but they can't even
pass the cost onto the consumer.  They will close up shop.  Vietnam is 
heading towards a hard economic landing.  The only thing keeping Vietnam 
afloat is the continual money from abroad being poured into Vietnam, and that is iffy at best in the current environment.

--- On Sun, 6/22/08, Tran Dinh Hoanh <tdhoanh at gmail.com> wrote:

> From: Tran Dinh Hoanh <tdhoanh at gmail.com>
> Subject: Re: [Vnbiz] raising import taxes correlated with USD strength?
> To: vnbiz at vietlinks.net
> Date: Sunday, June 22, 2008, 9:01 PM
> [ Vietnam Business Forum
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