Central bank might work to increase nation’s foreign exchange reserves
Central bank might work to increase nation’s foreign exchange reserves
Based on the cooling exchange rate, the State Bank of Vietnam (SBV) may increase the US dollar buying price at the SBV’s Central Banking Department (CBD) to supplement the country’s foreign exchange reserves, analysts said.
Headquarters of the State Bank of Vietnam in Hà Nội. The exchange rate listed in the interbank market, at commercial banks and the unofficial market have all cooled down, narrowing the increase compared to the end of 2023 to only 1.5 per cent. — Photo sbv.gov.vn |
In a recent report, analysts from the Saigon Securities Incorporation (SSI) said the selling rate at the CBD currently decreased by about VNĐ100 to VNĐ25,362 while the buying rate remained unchanged at VNĐ23,400 per dollar.
The exchange rates listed in the interbank market, at commercial banks and the unofficial market, have all cooled down, narrowing the increase compared to the end of 2023 to only 1.5 per cent as of September 6, according to SSI Research data.
At the same time, the rate gap between the unofficial market and commercial banks is almost insignificant. On September 6, the dollar was listed at VNĐ25,050 - 25,090 in the unofficial market, compared with VNĐ24,500 - 24,870 at Vietcombank.
At the end of last month, for the first time in four months, the SBV adjusted the dollar selling price at the CBD from VNĐ25,450 to VNĐ25,385 per dollar. By September 6, the selling rate continued to decrease to VNĐ25,362.
Meanwhile, the buying rate at the CBD has still maintained at VNĐ23,400 per dollar, much lower than the interbank rate.
However, in the context of the dollar cooling down, SSI's analysts said the SBV might increase this buying rate to enable the addition of more foreign currency to the nation’s foreign exchange reserves.
According to data from WiChart, the SBV has maintained the buying rate at VNĐ23,400 per dollar since mid-May 2023. Previously, the SBV strongly increased the buying rate from VNĐ22,250 to VNĐ23,450 per dollar at the end of the third quarter of 2022.
Sharing the same view, Nguyễn Thế Minh, director of Yuanta Vietnam Securities Company’s Analysis and Product Development, said that the SBV would take advantage of the opportunity to buy additional dollars in the context of the cooling exchange rate.
However, as the exchange rate is still under some pressure from both outside and inside, the SBV would not necessarily supplement the nation’s foreign exchange reserves at all costs, but would buy when the exchange rate falls deeply, Minh forecast.
In the context of sharp declines in the foreign exchange rate in the past few weeks, the SBV has also loosened monetary measures.
Specifically, the SBV has stopped offering treasury bills since late last month, besides reducing the bill interest rate from 4.2 per cent per year to 4.15 per cent per year.
In addition, the SBV has also reduced the open market operation (OMO) interest rate from 4.5 per cent to 4.25 per cent.
