Vietnam's inflation rises to 22%, highest among Asian economies

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By Jason Folkmanis
Bloomberg News
Friday, July 22, 2011

http://www.bloomberg.com/news/2011-07-23/vietnam-s-inflation-accelerates...

HO CHI MINH CITY, Vietnam -- Vietnamese inflation accelerated for an 11th month in July after the central bank cut a key interest rate even as the nation faces the fastest price gains in Asia.

Consumer prices rose 22.16 percent from a year earlier, compared with June's 20.82 percent pace, data released by the General Statistics Office in Hanoi showed today. Prices climbed 1.17 percent from June.

The central bank reduced its repurchase rate to 14 percent from 15 percent on July 4 after a spate of increases since November to fight inflation, leading the International Monetary Fund to say the cut may confuse investors. The benchmark VN Index of stocks is down 16 percent this year, on concern price gains will hurt the economy.

"The markets were very surprised by the easing," Prakriti Sofat, a Singapore-based economist at Barclays Capital, said before the release. "It's too early to go into a full-blown easing cycle given that inflation and inflation expectations remain elevated."

... Dispatch continues below ...



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Vietnam will find it "very difficult" to slow inflation to 17 percent by the end of 2011, Ha Van Hien, head of the National Assembly's Economic Committee, told the opening of the body in Hanoi on July 21. It may peak as high as 23 percent in August before slowing to 18 percent by year-end, Sofat said.

The VN Index fell 0.9 percent yesterday to 409.2, while the dong weakened 0.1 percent, according to data compiled by Bloomberg. The currency was devalued by about 7 percent in February, the most since at least 1993, risking costlier imports.

Food, transport, and construction-material prices have stoked consumer-price growth, according to Australia & New Zealand Banking Group Ltd. Transport prices rose 21.7 percent from a year earlier in July, today's data showed. July's annual inflation rate is the highest in a basket of 17 Asian economies tracked by Bloomberg.

Prime Minister Nguyen Tan Dung in February cut the credit-growth target and ordered a tighter monetary policy to try to tame inflation, revive confidence in the economy and prevent another credit-rating downgrade. This month's rate cut wasn't a "policy signal," the central bank said in a July 8 statement.

"We assume policymakers are again demonstrating their low tolerance for slower growth," Christian de Guzman, a Singapore-based assistant vice president at Moody's Investors Service, said in a note on July 11.

The nation's economy expanded 5.6 percent from a year earlier in the first half of 2011. Moody's said that a "tight" monetary policy would threaten the government's full-year target of 6 percent.

"We are a bit concerned that the cut in rates will confuse the market about the government's commitment to sustaining the stabilization effort under Resolution 11," Benedict Bingham, the IMF’s senior resident representative in Vietnam, said this month. Resolution 11 refers to the steps Dung took in February.

"A strong commitment to sustaining this effort is essential to re-establishing confidence in the dong and restoring macro-economic stability more generally," Bingham said.

The State Bank of Vietnam had increased the repurchase rate for the seven-day term from 7 percent at the start of November 2010 before this month's cut. It appears to have become the benchmark for monetary policy, according to JPMorgan Chase & Co.

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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf