Vietnam PM says no need for capital controls
HANOI - Vietnam will not need to impose capital controls to cool its booming stock market, said Prime Minister Nguyen Tan Dung according to a statement published on the official government website Wednesday.
There has been speculation in recent weeks that the communist country will impose some restrictions on the flow of foreign funds that have helped fuel a stock market boom which has been among the fastest in the world.
"The prime minister said it is not yet necessary to apply urgent measures to control foreign exchange from foreign indirect investment, as proposed by the State Bank of Vietnam at a meeting on February 12," said the online statement.
Dung was quoted as saying in the Vietnamese-language statement that "the Vietnamese stock market has seen rapid development and has become a significant channel for capital mobilisation for the national economy."
But he had also ordered close supervision by market watchdogs to "ensure the rapid, sustainable development of the stock market" while "avoiding negative changes causing socio-economic instability."
Those who violate market rules would be banned from trading, he said.
Vietnam's main stock index -- which listed 109 companies with a market capitalisation of 15.75 billion dollars as of Tuesday -- rose 144.5 percent last year, and is up over 45 percent so far this year.
Australia's ANZ Bank warned in a February 9 research note that there was "growing speculation on the ground in Vietnam" that the communist government was poised to introduce capital controls on March 1.
ANZ said there was a belief Vietnam may require foreign investors in the equity or bond markets to hold their investments for a minimum of one year and that it may introduce a 30-day approval period for earlier remittances.
Agence France Presse - February 28, 2007.
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