HÀ NỘI – Commercial banks have consecutively lowered the value of the US dollar against the Vietnamese đồng during the final days of 2018, helping the USD/VNĐ exchange rate close the year under control.

The exchange rate at commercial banks dropped sharply over the past three days, pushing the rate below the threshold of VNĐ23,300 per dollar, the lowest level since September 21 this year.    

On Friday alone, banks depreciated the dollar against the đồng by some VNĐ15-40 per dollar.

Vietcombank cut both buying and selling rates by VNĐ20 per dollar, listing the buying rate at US$23,170 and the selling rate at VNĐ23,260. 

The rates at BIDV went down by VNĐ30 to VNĐ23,165 for buying and VNĐ23,255 for selling. 
At Techcombank, the buying rate decreased by VNĐ20 to VNĐ23,140 per dollar and the selling rate by VNĐ15 to VNĐ23,255. 

The decline was notable especially when the central bank consecutively raised the daily reference USD/VNĐ exchange rate. On the last working day of 2018, the State Bank of Việt Nam (SBV) continued to adjust the rate upwards by VNĐ20 to VNĐ22,825 per dollar. With the current trading band of +/- 3 per cent, commercial banks were allowed to sell the dollar at the cap of VNĐ23,509 and the floor rate of VNĐ22,141 on the day.

During the day, SBV’s transaction office also kept the buying and selling rates of dollars to commercial banks unchanged from the previous day at VNĐ22,700 and VNĐ23,439 per dollar, respectively.

According to data from the National Financial Supervisory Commission (NFSC), the đồng was relatively stable against the dollar in 2018, with the central bank’s daily reference USD/VNĐ exchange rate increased by about 1.5 per cent compared to the beginning of the year while the rate listed at commercial bank increased by about 2.8 per cent.

The commission attributed the slight increase of domestic exchange rate to international factor of the US dollar index rising about 5 per cent against the beginning of the year and up 9 per cent compared to the bottom in February 2018, as well as domestic inflation pressures.

However, the rise was slight thanks to positive support from the country’s balance of supply and demand of foreign currency, NFSC noted.

Reports from Bảo Việt Securities (BVSC) also showed that the đồng is among the currencies that have stiff resistance against the US Federal Reserve (Fed)’s lending rate increases, and Việt Nam is the only country in Southeast Asia that has not taken its cue from the Fed.

According to the NFSC, the stable exchange rate has contributed to the country’s macroeconomic stability and inflation control, thereby strengthening the confidence of foreign investors in the Vietnamese economy.

NFSC also predicts that the pressure on the exchange rate will be reduced in 2019 as both domestic and international factors tend to be more favourable than in 2018.

Specifically, the US dollar will possibly not increase much or even weaken while domestic inflation will be controlled at about 4 per cent since the global commodity prices do not increase much; and the pressure on the exchange rate will decrease.

Though believing the pressure on the đồng in 2019 will not be as high as in 2018, BVSC analysts said prudence is needed and the central bank will likely maintain tight liquidity policy in 2019, with the dong injection into the market in 2019 to be not as much as in the first half of 2018.

The SBV protects the value of the đồng by reducing liquidity of the banking system, and the bank will maintain its strict liquidity management to counter Fed’s lending rate gains in 2019, BVSC analysts said. - VNS