Foreign reserves at record $57b

February, 09/2018 - 09:00

State Bank of Việt Nam (SBV) continues to build up its foreign exchange reserves to cushion external shocks, raising the fund to more than US$57 billion till February 6.

A customer makes transactions at HCM City Development Bank (HDBank). — VNA/VNS Photo Trần Việt
Viet Nam News

HÀ NỘI — State Bank of Việt Nam (SBV) continues to build up its foreign exchange reserves to cushion external shocks, raising the fund to a new record high of more than US$57 billion till February 6.

According to SBV Governor Lê Minh Hưng, SBV’s net purchase of hard currencies this year has been worth more than $4 billion.

SBV affirmed it would continuously try to increase the country’s foreign reserves this year, besides supporting efforts to stabilise the forex market.

Experts have so far been optimistic about the foreign exchange market in 2018, noting that the market would be stable, with the Vietnamese đồng devaluing slightly by some 0.5-1 percentage points to VNĐ22,710-VNĐ22,950.

According to the Bank for Investment and Development of Việt Nam’s capital and monetary research division, the country’s overall balance of payment can maintain a healthy surplus of some $8-10 billion this year, which is important for the stability of the forex market.

The good balance of payment is expected due to a predicted trade surplus this year, while the remittance inflow is likely to inch by 5 per cent to some $10.5 billion.

Foreign direct and indirect investment capital inflows are also anticipated to maintain high growth, owing to improvement in the business environment of the country, the division said, forecasting the disbursement of capital source could reach $21-23 billion this year.

Last year, SBV also successfully made a net purchase of $13 billion, raising the forex fund to $53 billion, the highest ever.

Bloomberg reported last year that the Vietnamese đồng was one of the most stable currencies in Asia in 2017.

Hưng attributed the success to SBV’s insistence in monetary and foreign currency policies.

“The rising foreign reserves has contributed to strengthening Việt Nam’s prestige and creating confidence in investors investing in Việt Nam,” he said.

According to him, liquidity of the domestic foreign exchange market last year was good and met the legal demands of local organisations and individuals.

Thanks to the high foreign reserves, domestic commercial banks on February 8 continued devaluing the US dollar against the Vietnamese đồng for the second consecutive session, despite a rise of the greenback in the global market.  

The decline was seen in the context of the country’s abundant dollar supply source, while having no demand pressure.

State-owned Vietcombank on February 8 afternoon listed the dollar at VNĐ22,650 and VNĐ22,720 for buying and selling, respectively, down 10 đồng against the previous day and VNĐ25 from Monday.

BIDV also cut the buying and selling rate by 25 đồng and 15 đồng to quote the dollar at VNĐ22,650 and VNĐ22,730, respectively, while the decreasing rate at Vietinbank is 9 đồng to VNĐ22,652 for buying and VNĐ22,722 for selling.

The same move was also seen at joint stock commercial banks, with a decrease of 15-25 đồng per dollar.

ACB devalued the dollar by 20 đồng against the previous day to VNĐ22,650 for buying and VNĐ22,720 for selling, while Techcombank listed it at VNĐ22,650 and VNĐ22,740 for buying and selling, respectively.

The State Bank of Việt Nam on February 8 also set the daily reference exchange rate at VNĐ22,435 per dollar, down by 10 đồng from the previous day.
With the current trade band of +/- 3 per cent, the ceiling rate applied to commercial banks during the day is VNĐ23,108 and the floor rate is VNĐ21,762.

In the global market, the dollar was supported after a budget deal in Washington, rising against a broad range of currencies. US congressional leaders reached a two-year budget deal on Wednesday to raise government spending by some $300 billion. The dollar index rose to a two-week high of 90.403 on Wednesday and last stood at 90.251. — VNS