State Treasury wants to buy an additional $300 million from banks

State Treasury wants to buy an additional $300 million from banks

This is the fourth foreign currency purchase request from the Treasury since the beginning of the year.

The price of the dollar has been decreasing at commercial banks recently. — VNA/VNS Photo Trần Việt

The State Treasury recently announced a plan to purchase foreign currency from commercial banks at a projected value of up to US$300 million.

The transaction type is a spot transaction, with March 13 as the transaction date and March 17 as the expected settlement date.

The request was made due to the price of the US dollar decreasing at commercial banks recently.

This is the fourth request for foreign currency purchase from the State Treasury since the beginning of the year, bringing the total amount it has purchased in the past month to $800 million.

Previously, the Treasury had offered to buy $150 million, $200 million and $150 million from commercial banks on February 13, 19 and 25, which were all spot transactions.

A foreign exchange spot transaction is when two parties agree to exchange one currency for another, at an agreed price for settlement on the transaction date (or ‘spot date’).

Speaking to the Doanh nhân Việt Nam (Vietnamese Businesspeople) online magazine, Dr Nguyễn Hữu Huân from the University of Economics Hồ Chí Minh City said that the State Treasury’s purchase of the dollars to settle foreign debt is expected, but it will inevitably put more pressure on the exchange rate.

"The State Treasury is communicating with the State Bank and commercial banks in advance to prepare the appropriate foreign currency amounts, to avoid seasonal impacts on the exchange rate," he said.

On the foreign exchange market on Thursday, the central exchange rate announced by the State Bank of Việt Nam was VNĐ24,758 per dollar, down by VNĐ5 compared to Wednesday’s rate.

The exchange rate at the State Bank’s transaction office also decreased correspondingly, to a range of VNĐ23,571–25,945 per dollar (buying–selling) compared to Wednesday.

At the meeting between the central and local governments on February 21, the Governor of the State Bank said that the exchange rate was under significant pressure, with the imbalance between the supply and demand for foreign currency the main influencing factor. 

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