The message was delivered by the PM during his meeting with David Frenandez, economic chief of JPMorgan Chase group, in Hanoi on June 5.

The PM said that despite pressure from the markets, Vietnam’s overall balance of payment still enjoyed a trade surplus of some US$1 billion in the first five months of this year.

The range of VND-US$ exchange rates released by the State Bank of Vietnam stands at plus or minus 1 percent, which is lower than the previously estimated figure of ± 2 percent.

Mr Dung believed that with Vietnam’s current foreign currency surplus, the exchange rates should be adjusted flexibly to approach ± 2 percent.

The PM also refuted the claims of some foreign newspapers that the Vietnamese dong is losing its value by 20-40 percent, saying that they are unfounded.

He said the increasing value of the US$ over the VND on the free market over the past few days is nothing but rumour and speculation and is not caused by so-called imbalances in the foreign currency supply and demand relationship driven by the overall balance of payment.

He told Mr Frenandez that he is having functional agencies supervise and assist foreign currency dealers in this unofficial market.

Answering the question raised by JPMorgan Chase’s financial sponsors group as to whether the Vietnamese Government will intervene in controlling the withdrawal of funds by short-term investors, Prime Minister Nguyen Tan Dung affirmed, with the current amount of foreign exchange reserve in the State Bank of Vietnam, the country can keep tabs on the currency flowing of foreign investors without resorting to any instruments to control funds. The Government will announce the level of currency reserve in US$ soon in order to consolidate investors and people’s trust.

Sharing this point of view, Dr David Frenandez said there is no good reason for predicting the VND will be depreciate. He agreed that the consumer price index in Vietnam at present is higher than in reality, mostly because of rumour and speculation. The index is expected to decrease gradually by the end of this year.

He said the main cause of inflation is a spike in food prices. But there are many indications that prices will go down. Besides, the Government is carrying out solutions to curb inflation, in particular by cutting down public spending and saving expenditure. Managing and tightening public spending means the demand for imported materials will also slow down, leading to a fall in imports.

David Frenandez forecast Vietnam’s imports will cost about US$4 billion in the remaining months this year.