Central bank lowers dollar rate to keep exchange rate steady

Update: July, 04/2018 - 13:00
Commercial banks on Tuesday can buy the greenback from the SBV’s Operation Centre at VND23,050 per dollar. — Photo VNA
Viet Nam News

HÀ NỘI — The State Bank of Việt Nam (SBV) has stepped in to steady the dollar-đồng exchange rate by selling the greenback on Tuesday at 1 per cent lower than the previous day’s rate.

Commercial banks were able to buy from the central bank’s Operation Centre at VNĐ23,050.

The SBV also cut the daily reference exchange rate by VNĐ5 to VNĐ22,630 to the dollar. With the current trading band of 3 per cent, the ceiling rate for banks during the day was VNĐ23,309 and the floor rate was VNĐ21,951.

Following the move, Vietcombank reduced both buying and selling rates by VNĐ5 to VNĐ23,000 and VNĐ23,070, but other lenders continued to hike their rates.

BIDV increased both by VNĐ20 to VNĐ23,010 and VNĐ23,080.

Techcombank’s buying rate was VNĐ22,980, up VNĐ50 from the previous day, and selling rate was VNĐ23,080.

Earlier SBV Governor Lê Minh Hưng had told an online conference between the Government and localities that the central bank was willing to intervene in the foreign exchange market if supply or demand problems arose.

The dollar has appreciated significantly against the đồng recently.

According to Nguyễn Đức Độ, deputy head of the Economics and Finance Institute, besides the appreciation of the dollar following the US Federal Reserve’s recent interest rate hike and the accelerating US-China trade war risk, there is also a psychological factor at play following rumours that the rate would remain upward bound.

But he expects the SBV to take strong measures to prevent the dollar from strengthening to much against the đồng to prevent a repeat of the dollar hoarding a few years ago.

Besides, it also needs to keep the exchange rate steady to enable the Government to achieve its goal of keeping inflation below 4 per cent this year, he added. — VNS