Viet Nam News
HÀ NỘI — Việt Nam’s foreign reserves has increased by 130 per cent to nearly US$64 billion in the past two-and-a-half years, Prime Minister Nguyễn Xuân Phúc said.
At a group meeting of the National Assembly on socio-economic affairs on Tuesday, Phúc said the exchange rate has been also stable and inflation has kept under control.
Experts attributed the stability to factors such as State Bank of Việt Nam (SBV)’s flexible central rate management mechanism, which ensured that the domestic foreign exchange market was less affected by global factors.
In addition to this, the domestic supply-demand relationship with the dollar was relatively stable, thanks to foreign currency supply from exports, foreign investment, official development assistance, tourism and remittances.
SBV affirmed it would continuously try to build up the country’s foreign reserves this year to cushion external shocks, besides supporting efforts to stabilise the forex market.
Fitch Ratings recently also forecast that Việt Nam’s foreign reserves would increase to about $66 billion by the end of this year from $49 billion in 2017.
This year, SBV has changed its way of purchasing foreign currency. Instead of using spot trade, the central bank has used futures contracts for the purchase of hard currencies since February 7 this year.
Previously, the bank used to buy foreign currency in spot trade, with volumes reaching $1-3 billion per day, meaning that an equivalent volume of Vietnamese dong was pumped into the market in a short time.
But since February, the bank has launched three-month futures contracts to regulate the flow of currency in a more flexible way. Some 40 per cent of the foreign reserves have been purchased through futures contracts, helping to balance cash flows to moderate the pressures on interest rates, US dollar/đồng exchange rate and inflation.
On Wednesday, SBV set the daily reference exchange rate at VNĐ22,584 per dollar, down by VNĐ11 against the previous day.
With the current trading band of +/- three per cent, the ceiling rate applied to commercial banks during the day is VNĐ23,261 per dollar and the floor rate is VNĐ21,907 per dollar.
Major commercial banks, such as Vietcombank, on Wednesday listed the USD/VNĐ exchange rate unchanged from the previous day, buying the greenback at VNĐ22,735 and selling it at VNĐ22,805.
Last week, commercial banks devalued the dollar against the đồng by VNĐ2.4 on an average, listing the dollar at VNĐ22,766.4. Meanwhile, the daily reference exchange rate quoted by SBV increased by VNĐ2 to VNĐ22,568.
The week saw the US Dollar Index in the global market rise by 0.9 per cent against other major currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, to 93.45 points. — VNS