Traffic Congestion Resurfaces in Ho Chi Minh City

Key pointsThe US Federal Reserve's interest rate hike may increase foreign currency demand in Vietnam, potentially putting pressure on exchange rates and liquidity. However, the Vietnamese government and central bank believe they can manage these impacts effectively due to the strong economic foundation and flexible policy management. The Fed raised rates by 0.25 points and hinted at further tightening.
Business impactJapanese companies need to reassess their financial strategies in light of rising exchange rate risks and funding costs, especially those involved in import-export activities, focusing on securing foreign currency liquidity.

Key pointsTraffic congestion has resurfaced in Ho Chi Minh City, particularly affecting students as the new school term begins. Notable traffic jams are occurring on major routes and around schools, with increased paralysis during rainy weather. City authorities have identified 28 congestion points and are planning solutions.
Business impactThis is likely to impact logistics and commuting for Japanese companies, necessitating adjustments to commuting times and delivery schedules. Business operations are expected to be affected until congestion relief measures are implemented.

Key pointsThe State Bank of Vietnam has announced guidelines for credit growth in 2026, deciding to revise the calculation method for credit balances in certain areas of the real estate sector. This change aims to ensure the safety and transparency of the banking system and operate based on market principles. Notably, there is a call for capital enhancement at Agribank, aiming to improve financial capacity in line with international standards.
Business impactThis policy change may directly affect the lending plans and real estate investment strategies of Japanese companies. Stricter lending conditions are anticipated, necessitating a review of funding strategies.

Key pointsVietnam's Eximbank has been awarded the 'Best Trade Finance Transaction' by the Asian Development Bank (ADB) for its support of a trade finance deal aimed at small and medium-sized enterprises (SMEs). This transaction assists a Vietnamese wood pellet manufacturing and exporting company in accessing international trade financing, as part of ADB's trade finance program. Eximbank acted as the issuing bank, with J.P. Morgan as the confirming bank, and ADB provided guarantees. Eximbank aims to strengthen collaboration with international financial institutions to enhance access for companies to international markets.
Business impactThis award enhances the credibility of Eximbank's trade finance services and serves as a crucial factor in supporting SMEs' entry into international markets. Japanese companies may find it valuable to strengthen partnerships with Vietnamese SMEs and consider utilizing trade finance.

Key pointsThe U.S. Federal Reserve (FRB) has decided to raise interest rates for the first time in nearly three years, leading to a sharp decline in international gold prices, which have fallen below $4,300 per ounce, alongside a strengthening dollar. This trend is expected to increase exchange rate and inflation pressures on the Vietnamese economy, potentially creating a divide between export-oriented companies and those reliant on imports.
Business impactJapanese companies need to reassess their strategies considering the impact of the rising dollar and fluctuating gold prices on raw material costs and export competitiveness.

Key pointsThe Vietnam Securities Commission has announced a regulation requiring crypto exchanges to submit audited reports on customer assets twice a year. The reporting deadlines are set for July 31 and January 31 each year, including details on the status of customer deposits and audit results. This regulation aims to enhance investor protection in the rapidly growing crypto asset market.
Business impactFor Japanese companies, while the tightening of regulations in the crypto asset sector does not pose a direct business risk, the increased transparency in financial infrastructure is a welcomed aspect. It is essential to monitor regulatory developments when considering investments.