State Bank to hold forex rate steady
State Bank to hold forex rate steady
The State Bank of Viet Nam (SBV) will not adjust the foreign exchange rate, SBV deputy governor Le Minh Hung pledged yesterday.
The forex rate has been heating up for the past few weeks, ever since the SBV decided to raise the inter-bank average exchange rate between the dong and US dollar by 1 per cent to VND21.036 on June 27.
Hung said that the rise of the forex rate was not because of an inbalance in supply and demand, but merely psychological factors.
Market speculation was also another reason for the recent fluctuations in the forex rate, Hung said.
To stabilise the rate, Hung said that SBV would take bold measures, including pumping more US dollars into the market.
The SBV plans to adjust up the forex rate by 2-3 per cent this year.
The SBV set the exchange rate for the US dollar at VND21,036 yesterday, which can move in a band of plus or minus 1 per cent.
Yesterday, Vietinbank raised dollar prices by VND5/dollar for bid, while commercial banks were offering buying prices from VND21,220-21,235/dollar and selling at a ceiling of VND21,246/dollar as of 09:15am.
The selling and buying prices for the dollar in Ha Noi's free market fell to VND21,680 and VND21,650, falling between VND70-80 per dollar compared with the previous day.
Member of National Monetary Policy Consulting Council Le Xuan Nghia said the price had fallen because banks had stopped buying foreign currency to settle forex positions.
Nghia said when the dong's interest rate was high, many banks sold off their dollars for dong. "Now the difference between the dong and the dollar is decreasing, so banks have been forced to revert to the greenback."
According to online news VnExpress, a member of the National Monetary Policy Consulting Council who wanted to remain anonymous said it was estimated that banks previously lacked around $1-1.2 billion, but that had fallen to $200 million.
The SBV's decision to increase the forex rate has made many experts fear speculation from banks.
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