Vietnam cbank devalues VND by 1% against USD to 'control inflation'
Vietnam cbank devalues VND by 1% against USD to 'control inflation'
The Vietnamese dong is devalued by one percent against the dollar on interbank transactions as of Wednesday, the State Bank of Vietnam (SBV) announced late Tuesday.
The midpoint for trading the dong shifted to 21,458 per dollar from 21,246, a level the SBV set last June, the State Bank of Vietnam, the country’s central bank, said on its website.
Dollar/dong transactions can move in a band of plus or minus one percent around the midpoint, which the central bank sets daily.
This means a range from VND21,243 to VND21,673 to the greenback following the latest midpoint change.
The SBV said the adjustment helps stabilize the foreign exchange market and enables it to “control inflation, ensure macro-economy, and boost economic growth."
"The State Bank of Vietnam will guarantee to implement measures and policy instruments to stabilize the exchange rate and the foreign exchange market on the new price level," it said.
Shortly before the State Bank of Vietnam announced the exchange rate change on Tuesday, many local banks, including ACB or OCB, sold the greenback at the central bank’s ceiling of VND21,458 a dollar, according to newswire VTC.
On the unofficial markets the dong stood at 21,560/21,575 per dollar, having advanced marginally from 21,570/21,585 the previous day, according to Reuters.
At a meeting between Prime Minister Nguyen Tan Dung and local businesses in Hanoi in September last year, Governor Nguyen Van Binh said the dollar/dong exchange rate would remain stable and would be adjusted by no more than one percent.
In mid-December, Governor Binh said the central bank would aim to keep changes in the exchange rate within two percent in 2015.
The governor also revealed at the same meeting that Vietnam's foreign reserves had risen to the highest-ever level of over $35 billion.
“This not only reflects the stability of the Vietnamese dong but also fortifies our standing in the world arena,” he said.
