State Bank stabilises money market

01-Dec-2016 Intellasia | VOV | 6:00 AM Print This Post

Vietnam’s forex market has been shaken over the past few days. The VND/USD exchange rate has increased, prompting the State Bank of Vietnam to take steps to stabilise the financial market and Vietnam’s economy.

The value of USD in Vietnam has risen 3 percent in 2 weeks. Economists say the rise was due to the recovery of the global financial market after Donald Trump won the US Presidential election.

In December, the Federal Reserve is likely to raise its interest rate by 0.25 percent, which will increase the value of the USD.

During the last months of the year, the demand for dollars will increase because Vietnamese enterprises have to pay for their imports orders and the government and enterprises have to pay their foreign debts.

Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council, says recent fluctuations on the forex market are normal.

The VND’s value fell only 1.5 percent and Vietnam still has an export surplus. Even though, the State Bank is closely following market developments.

“Vietnam is adjusting its foreign exchange rates on a daily basis. The State Bank of Vietnam needs to closely monitor the market and respond by issuing bonds and increasing communications to ease public concerns. It should stay alert to promptly respond and work out scenarios for responding to the USD rise and devaluation of regional currencies,” he said.

Deputy Governor of the State Bank of Vietnam Nguyen Thi Hong said recent fluctuations of foreign exchange rates were due to human subjectivity. Since early this year, the State Bank has allowed the foreign exchange rates to respond to the daily global market changes.

Hong says despite fluctuations of many currencies on in the global market, the supply and demand in Vietnam has not changed dramatically and liquidity remains good.

“Demands for foreign currencies by enterprises and organisations are promptly met. The State Bank closely monitors macro-economic changes in domestic and foreign markets and quickly responds,” she said.

During the final months of the year, Vietnam’s forex supplies will be supported by export revenues, overseas remittances and disbursement of FDI.

The State Bank has allowed credit organisations to lend foreign currencies, helping reduce pressures on foreign currencies in the near future.


Category: Finance, Vietnam

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