Illustrative image (Source: VNA) HCMCity (VNA) – The State Bank of Vietnam (SBV) may sell part of itsforeign reserves to stabilise the monetary market if the exchange rate continuesto climb, the Saigon Securities Incorporation (SSI) forecast.
SSI on July 19 released a report on the country’sfinancial and monetary market in June and July, noting that the forex marketrecorded strong fluctuations in the two months when the USD/VND exchange ratesoared by 150 VND.
In the first two weeks of this month alone, theexchange rate jumped 100 VND, or 1.1 percent, to 23,010 VND (buying rate) and23,080 VND (selling rate) on the inter-bank market. It also rose dramaticallyby 360 VND to 23,180 VND (buying) and 23,230 VND (selling) in the free market.The difference of USD buying and selling prices surged from 20 VND to 50 VND.
SSI noted the pressure for exchange rateincrease in June was mainly caused by external and psychological factors. Anarray of currencies in the world sharply depreciated last month when the USofficially imposed high tariffs on Chinese imports, leading to heightened risksof trade war escalation.
Meanwhile, the foreign currency supply anddemand imbalance was not big enough to drive up the exchange rate strongly.
With the abundant foreign reserves of around 65billion USD, the SBV signalled that it is ready to make interventions to keepthe exchange rate stable. In fact, it slashed the USD selling price from 23,294VND down to 23,050 VND on July 3.
Since the beginning of July, the central bankhas also kept the daily reference exchange rate almost unchanged, suggestingthat it will not continue adjusting the rate. The forex rate set by commercialbanks has also become stable, only the rate in the free market remains high.
SSI said the SBV’s pledge to keep the exchangerate stable, the abundant foreign reserves, and balanced foreign currencysupply and demand are the factors supporting the exchange rate’s stability.-VNA
SSI on July 19 released a report on the country’sfinancial and monetary market in June and July, noting that the forex marketrecorded strong fluctuations in the two months when the USD/VND exchange ratesoared by 150 VND.
In the first two weeks of this month alone, theexchange rate jumped 100 VND, or 1.1 percent, to 23,010 VND (buying rate) and23,080 VND (selling rate) on the inter-bank market. It also rose dramaticallyby 360 VND to 23,180 VND (buying) and 23,230 VND (selling) in the free market.The difference of USD buying and selling prices surged from 20 VND to 50 VND.
SSI noted the pressure for exchange rateincrease in June was mainly caused by external and psychological factors. Anarray of currencies in the world sharply depreciated last month when the USofficially imposed high tariffs on Chinese imports, leading to heightened risksof trade war escalation.
Meanwhile, the foreign currency supply anddemand imbalance was not big enough to drive up the exchange rate strongly.
With the abundant foreign reserves of around 65billion USD, the SBV signalled that it is ready to make interventions to keepthe exchange rate stable. In fact, it slashed the USD selling price from 23,294VND down to 23,050 VND on July 3.
Since the beginning of July, the central bankhas also kept the daily reference exchange rate almost unchanged, suggestingthat it will not continue adjusting the rate. The forex rate set by commercialbanks has also become stable, only the rate in the free market remains high.
SSI said the SBV’s pledge to keep the exchangerate stable, the abundant foreign reserves, and balanced foreign currencysupply and demand are the factors supporting the exchange rate’s stability.-VNA
VNA
