|A customer exchanges foreign currency at a VP Bank in Ha Noi. Dollar rates eased yesterday morning after Fed deciced to keep its rates unchanged. — VNS Photo Truong Vi
HA NOI (VNS) — The dollar–dong
exchange rates eased yesterday morning at domestic commercial banks, following a decision by the United States Federal Reserve (Fed) to keep its interest rates steady.
Vietcombank slashed both the buying and selling rates of the American dollar by 25 dong from the previous day's close, listing them at VND22,445 and VND22,505 per dollar, respectively.
Vietinbank quoted its buying rate at VND22,445 per dollar and the selling rate at VND22,500 per dollar, both down 40 dong.
BIDV cut its buying rate by 25 dong to VND22,460 per dollar and the selling rate by 20 dong to VND22,520 per dollar.
At Eximbank, the buying rate was down 40 dong to VND22,430 per dollar and the selling rate dropped by 35 dong to VND 22,510 per dollar.
Similar rate adjustments were reported at Dong A Bank, which bought a dollar for VND22,460 and sold it for VND22,510.
ACB lowered its buying rate by up to 50 dong to VND22,420 per dollar, and the selling rate by 45 dong to VND22,500 per dollar.
Currently, the average inter-bank exchange rate is VND 21,890 per dollar. The State Bank of Viet Nam (SBV) has listed the buying rate at VND21,800 per dollar and the selling rate at VND22,475 per dollar at its head office.
The dollar–dong exchange rates increased sharply after the central bank devalued the dong by one per cent, and widened the trading band for the reference rate to three per cent last month, in a bid to minimise the negative impact of the sharp Chinese yuan depreciation.
Market speculations about a Fed rate hike have fuelled worries about even more pressure on the domestic currency and economy, especially when Viet Nam's current account balance is sliding into a deficit.
National Financial Supervisory Commission Vice Chairman Truong Van Phuoc said the US rates staying unchanged had allowed the market to heave "a sigh of relief", as it indicated that the Fed was continuing to maintain high caution while the US economy remained sluggish.
He said the move could not reverse market trends, however, since the US central bank would continue to aim at rate hikes later this year.
"The exchange rate is a function that contains many variables...Viet Nam's exchange rate policymakers must deal with not only the variable involved in the Fed but also the continuous devaluations of the Chinese yuan," Phuoc said.
"The puzzle of restricting trade deficits and stimulating exports is also to be considered, in the general context of global exchange rate fluctuations," he added.
According to Phuoc, domestic macro-economic conditions had stabilised, with the economy growing at rates of six to 6.5 per cent, and inflation had been controlled at low levels, with the expectation of reaching one to 1.5 per cent this year.
"These factors create quite a bright outlook with positive prospects [for the domestic economy] during the rest of the year, whether the Fed raises rates or not," he said.
Banking and Finance expert Nguyen Tri Hieu argued that the latest Fed decision would only generate temporary [monetary] stability in Viet Nam and that the SBV should take proactive measures to cope with future fluctuations.
Phan Khanh Dung, director of investment consultancy at brokerage Maybank Kim Eng Securities, said the possibility of US interest rates rising any time soon would certainly affect the domestic stock market.
"Some foreign investors may withdraw money for American deposits instead of sharing investments in Viet Nam," he told Tuoi tre (Youth) Newspaper.
"However, in the medium term, their moves will depend on the responses and policies of Viet Nam, as well as investor confidence in Vietnamese shares," he said. — VN