|Banking experts predicted more fluctuations in foreign exchange rates from now till year-end because of higher domestic demand and clarified that this was normal. — Photo tinnhanhchungkhoan.vn
HA NOI (VNS) — Experts predicted more fluctuations in foreign exchange rates from now till year-end because of higher domestic demand and clarified that this was normal.
Banking expert Nguyen Tri Hieu told the Tuoi tre (Youth) newspaper that the fluctuation was normal and in accordance with the economic cycle.
Hieu explained that domestic demand for the US dollar from the Government and businesses, to be used for foreign loan payments, would often increase in the last quarter of the year.
Besides, rising import demand ahead of the country's largest festival in the New Year would also push up demand for dollars.
A huge gap between domestic and global gold prices had also sparked an increase in gold smuggling that was in turn sparking higher dollar demand, he said.
The foreign exchange rate in the last months of the year might reach the State Bank of Viet Nam's (SBV) regulated cap because of high demand, predicted Hieu.
The Vietnamese dong-US dollar exchange rate of commercial banks cooled down in the past week after the SBV affirmed that it would maintain the current average interbank exchange rate till year-end. Banks last Friday quoted a rate of VND21,335/21,385, a VND45 decrease from that of last Tuesday.
Previously, commercial banks sharply increased the exchange rate in the wake of an adjustment rumour. SBV deputy governor Nguyen Thi Hong attributed the increase to psychological factors arising from the rumour that the central bank may adjust the exchange rate upwards.
Hong said the SBV would continue to closely watch the foreign exchange market to ensure its stability as well as that of the monetary market.
If necessary, the SBV would sell dollars to stabilise the market in the set band, Hong added.
The SBV said the country's dollar supply and demand sources remained stable, with a surplus of roughly US$11 billion in the first nine months of the year. — VNS