Vietnam not short of dlrs, holds $35 bln-economist

HANOI, Feb 4 - Vietnam is not short of U.S. dollars and now has $35 billion in reserves and bank deposits, an economist at a government think tank wrote in a newspaper article on Thursday.

The central State Bank of Vietnam devalued the dong <VND=> by more than 5 percent in late November because the currency had been under pressure much of the year, in part because of a shortage of dollars circulating in the system.

The government then ordered seven major companies to sell their dollars. [ID:nHAN19100]

The U.S. dollar holdings now consist of $15 billion in reserves and $20 billion in deposits evenly split between institutions and residents, Vo Tri Thanh, deputy head of the Planning and Investment Ministry's Central Economic Management Institute, wrote in the Vietnam Financial Times.

Thanh did not give a figure for Vietnam's total foreign exchange reserves, which, excluding gold, dropped 21.3 percent to $18.8 billion as of August 2009 from $23.89 billion at the end of 2008, according to the International Monetary Fund.[ID:nHAN33860]

Vietnam's balance of international payments ran a deficit of $1.5 billion last year, Thanh wrote.

"The inflow is ample, but in Vietnam when dollars come in they go into reserves. It's important to create confidence so that reserves can go into circulation," Thanh wrote.

ANZ bank said in its February report released on Monday that the dong would continue to lose value because the government needed to support growth and address its balance of payments.

"Demand for U.S. dollars onshore remains strong amid building inflationary momentum," it said.

ANZ forecast the dong would fall 4.3 percent to 19,300 per dollar by the end of 2010, from 18,474 dong per dollar on Feb. 1.