Need to adjust foreign exchange rate

Many experts have urged foreign exchange rate between dong and US dollar to be adjusted following the recent dollar price pick-up.

The forex rate is projected to experience significant fluctuations by the end of this year due to surging dollar demand in the year end along with modest inward remittances, decreased foreign direct investment capital, narrowed gap between dong and dollar interest rates.

Deputy director of HSBC Vietnam Pham Hong Hai reckoned forex rate surges on soaring foreign currency demand for importing goods for the Tet holiday as well as for debt repayment.

Normally, local enterprises are hardly put on the alert and thus more vulnerable to foreign exchange risks, which could bring about market turmoil on foreign exchange fevers.

Therefore, it is high time foreign exchange rates be adjusted in order to ease pressure on foreign exchange rates in the year end primarily due to increased importing, according to director of Economic Research Centre, Maritime Bank Trinh Quang Anh. The rate should be gradually altered so as not to stir up the market that has long been familiar with nominal rates which are very much different from actual rates.

Also, the adjustment is expected to impede speculation of the green back that could incite foreign exchange fevers at the end of the year.

However, hardly any changes have been observed by far, said Truong Dinh Tuyen, member of the National Monetary Policy Committee citing the central bank’s administrative management measures.

Foreign exchange fluctuation within the range of 3pct for this year could be feasible, said a senior officer from the National Financial Supervisory Committee. Yet, given the increasingly strong dollar thanks to weakening euro, foreign exchange rate between dong and this green back should be extremely cautious, said economic expert Vo Tri Thanh.

 

Category: Finance