tnam's inflation rate rose to 12.17% on-year in January, from 11.75% in December. The country ran a trade deficit of $1 billion in January, following a deficit of $1.294 billion the previous month. "The timing of the rate hike suggests that February inflation data to be released next week will not be favorable," ANZ Bank wrote in a note. The note continued to say that the move would be insufficient to help achieve Vietnam's target of 7% inflation by the end of 2011, and that further rate increases are expected this year.
Vinashin Plans Business Review After Debt Payment Miss
Bloomberg 18 February 2011
Vietnam Shipbuilding Industry Group, the state-run company known as Vinashin, plans to present a KPMG LLP report on its business to creditors by mid-year after it missed a payment on a dollar-denominated bank loan. “The business review will help us to work out a proper plan for our future,” Vinashin Chairman Nguyen Ngoc Su said in an interview at his office in Hanoi. “It’ll take us about three to four months to complete and then show to the government and our lenders.” Vinashin got a $600 million loan in 2007 from banks led by Credit Suisse Group AG that paid interest of 1.5 percentage point more than the London interbank offered rate, according to data compiled by Bloomberg. While it made a $6.8 million interest payment on Dec. 23, the company missed a Dec. 20 deadline to make a $60 million principal payment and asked lenders for a one-year extension, Su said.
Moody’s Investors Service cut Vietnam’s credit rating one rung to B1 on Dec. 15, citing the risk of a balance of payments crisis and Vinashin’s “debt distress” after Su told a forum that it lacks money to repay the loan. Vietnam and its state- backed companies will face greater difficulties borrowing after Vinashin’s default, Moody’s senior credit officer Alan Greene said Dec. 24, after state-owned Vietnam National Coal-Mineral Industries Group was downgraded to B2 from Ba3. “The interest payment showed we are willing to pay lenders as soon as we can,” Su said. Vinashin will double revenue this year to more than 21 billion dong and will build “at least” 84 ships, he said.
Vinashin risked bankruptcy after expanding into businesses from securities to tourism, accumulating about 86 trillion dong ($4.1 billion) of debt as of June, the government said in August. Police are investigating Vinashin Finance Chief Ho Ngoc Tung following allegations of improper loan disbursements, the state-controlled Tuoi Tre newspaper reported on Feb. 16, without saying where it got the information. Police also arrested Trinh Thi Hau, former general director at Vietnam Shipbuilding Finance Co., Vinashin’s financing unit, according to the report. Tung couldn’t be reached at his office in Hanoi, and two telephone calls earlier this week weren’t returned. Su declined to comment on the report. The company’s debt will be cut to 53 trillion dong under a reorganization that ministries will work on through 2013, the government said in November. Vinashin, based in Hanoi, accounts for as much as 80 percent of Vietnam’s domestic shipbuilding capacity, its website shows.
USDA delays decision on catfish inspections
AP 20 February 2011
The Agriculture Department has delayed a decision on a new catfish inspection program that threatens to derail U.S. trade relations with Vietnam.
The agency released a proposed rule Friday seeking more comment on the key question of whether Asian catfish will be subject to a new inspection regime that Congress passed in 2008 and that Asian producers say could kill their export business to the U.S.
The domestic catfish industry, mostly located in Mississippi, Alabama and Arkansas, has worked for years to slow imports, arguing that Asian species are an inferior product and the imports pose safety risks. They convinced Congress to include new rules in the 2008 farm bill making catfish the only seafood to be inspected by USDA instead of the Food and Drug Administration.
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