Forex rate adjustment likely for early 2014
Forex rate adjustment likely for early 2014
The foreign exchange rate between the Vietnamese dong and US dollar is likely to be increased by one percentage point in early 2014, according to the Business Times.
The paper quotes a report of the Vietcombank Securities Company (VCBS) as saying that in the current context of inflation being well controlled, the latest adjustment between the dong and the dollar would be proper and in keeping with current needs.
The change is considered necessary, given that the Government's recent policies are aimed at depreciating the dong and lowering the interest rate to support and stimulate economic growth as well as attract investment, the report says.
After being adjusted by 1 per cent in late June the inter-bank average exchange rate between the dong and US dollar has been kept stable at VND21.036 during the third quarter of the year.
Early in the fourth quarter, the foreign exchange market showed signs of heating up slightly with the forex rate of some commercial banks edging close to the ceiling rate of VND21,246 per dollar.
Explaining this, VCBS experts said that the market's foreign currency demand often increased in the year's fourth quarter since enterprises typically expanded production to ensure supply of commodities for the peak shopping season, which meant they would need more foreign currency to import materials that they need.
They said that the trade deficit is also likely to be kept in the remaining months of the year, with the economy showing signs of recovery.
They also said that foreign currency supply would be stable in the future because foreign direct investment (FDI) had continuously increased over the last months to US$8.62 billion by September.
Foreign exchange reserves now were rather plentiful, making it meet the IMF's safety standard.
In addition, the World Bank has estimated that kieu hoi, or overseas remittances, would reach $11 billion by the end of the year.
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