Wednesday, February 21 2018

VietNamNews

Central Bank announces plan to hold exchange rate steady

Update: October, 07/2014 - 08:58
The State Bank of Vietnam has affirmed to maintain the current average interbank exchange rate of the Vietnamese dong and the US dollar. — Photo vietnamnet.vn
HA NOI  (VNS) — The State Bank of Viet Nam (SBV) has affirmed that it would maintain the current average interbank exchange rate of the Vietnamese dong and the US dollar.

SBV Deputy Governor Nguyen Thi Hong made this assurance as commercial banks in the past week increased the exchange rate in the wake of an adjustment rumour.

Hong attributed the increase to psychological factors arising from the rumour that the central bank may adjust the exchange rate upwards.

Last Wednesday, SBV Governor Nguyen Van Binh told a National Assembly Standing Committee session that while the central bank saw no need to interfere in the market as the exchange rates remained stable, it was considering taking action to support exports.

After the central bank's affirmation, the exchange rate in the market cooled down. Vietcombank yesterday afternoon quoted a rate of VND21,250/21,310, a decrease 15 dong from that of yesterday morning.

The rate at ACB and Eximbank also declined by 10 dong to VND21,230/21,310. BDIV's rate was down by 20 dong to VND21,250/21,310.

SBV operation centres quoted the exchange rate unchanged at VND21,200/21,400, and the interbank rate stood at VND21,246 per US dollar.

The SBV increased the official dong-dollar interbank exchange rate by one per cent last June, and the accumulative adjustment level was likely to reach 1.43 per cent this year, Binh said.

Hong said that in spite of the increase in the previous week, the current interbank rate was still much lower than the SBV-regulated cap. She affirmed that the central bank would continue to closely watch the foreign exchange (forex) market to ensure the stability of both the monetary and forex markets.

If necessary, the central bank will sell dollars to stabilise the market in the set band, Hong added.

The SBV said the country's dollar supply and demand sources have remained stable, with a surplus of roughly US$11 billion in the first nine months of the year. In September, banks and credit institutions continued to remain net buyers in the face of the low dollar demands of organisations and individuals.

Dollar liquidity in the market remains positive, with an average transaction volume of roughly $900 million to $1 billion daily. Banks have also met all legal dollar demands of organisations and individuals.

According to the SBV, after the exchange rate adjustment last June, it has continued buying more dollars to enrich its foreign reserves.

As for the forex market after the adjustment last June, Hong said the market has remained stable with a new exchange rate level, but this has remained much lower than the SBV-regulated cap.

In fact, Hong noted, the interbank exchange rate by end-September increased by only 0.5 per cent against that last December.

Last year, the central bank also increased the exchange rate by one per cent against the rate of less than two to three per cent set in early 2013. — VNS


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