Posted by: Frederik Balfour on June 23, 2008
With Asian governments from Beijing to Manila to Delhi trying to tame the inflationary beast, the Cambodians have come up with a rather unusual solution of their own. According to the Phnom Penh Post the economic mandarins in Phnom Penh have decided to cease publication of inflation figures to avert the possibility of “disorder and turmoil.” The most recent figures for January showed the CPI was up 18%.
In neighboring Vietnam, where May figures showed inflation raging at 25%, the government is moving towards more, not less disclosure. Hanoi has finally realized that a lack of transparency only fuels speculative behavior and panic. In the face of widening concern about the central bank’s ability to prevent a currency crisis, Hanoi for the first time last week released quarterly data on the balance of payments. That has helped the black market rate drop from over 19000 dong to about 17500 to the dollar now. The official rate is about 16620.
But as I update this blog on June 24, I see the Financial Times ran a story saying Vietnam had temporarily halted gold imports to prevent speculators dumping their dong. Apparently Vietnam has become the single largest market for gold bullion. That doesn’t come as a complete surprise to me, as last week during a lunch in Ho Chi Minh City, Scott Robertson, senior economist of Ho Chi Minh City-based Dragon Capital Group, and his boss, director Dominic Scriven, told me that on average $400 million worth of gold changes hands on the local gold exchange every day. By comparison, daily turnover of equities on the Ho Chi Minh exchange recently has been between $3 million and $10 million per session.