by Han Qiao

    HANOI, Sept. 17 (Xinhua) -- "Four-story house, 110 square-meters of floor space, located at central Hanoi, selling price of 10.8 billion Vietnamese Dong (VND)," this is an advertisement on Wednesday's newspaper New Hanoi.

    Along with 30 other advertisements on the same page, all the selling prices of the houses or apartments are quoted in Vietnamese Dong.

    But three months ago, when the foreign exchange market of Vietnam experienced strong fluctuation and Vietnamese Dong lost value markedly, most property holders offered their house or land in gold or U.S. dollars instead of Vietnamese Dong.

    The proportion of landlords selling houses in Vietnamese dong has increased from 30 percent to 50 percent in recent months, according to ACB Real Estate Company based in Ho Chi Minh City.

    A recovering economy with comparatively stable foreign exchangerate, slower growth in trade deficit, less price pressure, is the force putting Vietnamese dong back to quotable figures in the local property market, experts believed.

    Vietnamese economy experienced strong turbulence since the beginning of this year, with the most difficult time in June.

    The Vietnamese currency swiftly depreciated to about 18,500 VNDto one dollar in the free market in early June, 10 percent lower than price in mid-May. The inflation hovered above 20 percent, thehighest in a decade. The stock market saw index on a downward trend for almost one month, with some of the stocks losing 90 percent of the value from its highest point.

    Behind this is the government's blind pursuit of economic growth for the past years while failing to address hidden problemsin the economy. The monetary has been loose with credit supply growing too fast. The continuous expansion of trade deficit makes the economy hungry for foreign currencies.

    To deal with the situation, the Vietnamese government adopted a tightened monetary policy. The State Bank of Vietnam raised the benchmark interest rate of dong twice within one month from 8.75 percent to 14 percent per year. It also required the commercial banks to tighten the credit. Meanwhile, governments at all levels cut or delayed a large number of public-invested project.

    The macro-economic control measures have shown effects now. Vietnamese Dong regains its value to about 16,500 VND to one dollar now and this rate has been comparatively stable for the past one month and a half.

    The trade deficit grew slower compared with the first half of the year and it stood at 16 billion dollars in the first eight months this year.

    More encouragingly, the foreign direct investment (FDI) remained strong, indicating that the foreign investors did not lose confidence on the Vietnamese market. The FDI stood at 46.3 billion dollars in the first eight months, almost doubling the figure for the whole 2007.

    In a report released by the Asian Development Bank this week on Tuesday, the bank recognized Vietnamese government's effort to stabilize the economy. But it suggested that Vietnam needs to continue down on this road, following concerns that Vietnam may be tempted to loosen its fiscal and monetary policies in an effort to spur the economic growth rate again,

    Vietnam needs to continue measures to stabilize its economy, even to slow growth in 2009, to be better prepared to resume strong economic growth in 2010-2011 period, it said.