Sunday, 26 May 2019

Vietnam's FX reserves exceed US$60 billion: Deputy PM

Updated at Sunday, 28 Oct 2018, 13:48
The Hanoitimes - Vietnam`s exchange rate policy has been managed on the basis of market mechanism.
Vietnam's foreign exchange reserves are in excess of US$60 billion, Deputy Prime Minister Vuong Dinh Hue has been quoted by local media as saying.
Illustrative photo.
Illustrative photo.
Vietnam has been successfully keeping the inflation rate at below 4% over the past three years, while the interest rates for some priority sectors has been stabilized or even decreased, Hue said at a recent hearing held by the National Assembly.

Additionally, the exchange rate policy has been managed on the basis of market mechanism, Hue affirmed, adding that Vietnam has combined effectively fiscal and monetary policies, and trade activities.  

In the coming time, the Vietnamese government will give top priority to stabilizing macro-economic conditions and bolstering the resilience of the banking sector against economic shocks, which is also the government's objectives for next year, Hue said. 

On October 27, he stressed that the Vietnamese government does not intend to depreciate the Vietnamese dong (VND) as a means to support exports and ease inflation.

However, the high level of openness of the Vietnamese economy (the sum of exports and imports in as per GDP is around 200%), coupled with global uncertainties such as the US FED's policy of interest rate hikes and the US - China trade friction, could put more pressure on the government's macroeconomic management.

Previously, Andy Ho, CIO of VinaCapital, said the devaluation of the Chinese yuan (CNY) would partly put pressure on the VND, however, Vietnam's foreign exchange reserves are sufficient to help stabilize the exchange rate until the end of the year.

The State Bank of Vietnam (SBV)'s net purchase of foreign currencies exceeded US$11 billion in the first half of 2018, taking the nation's foreign exchange reserves to approximately US$63.5 billion, said SBV Governor Le Minh Hung at a government meeting on July 2. 

"This shows the bank has sufficient resources and instruments to stabilize the USD/VND exchange rate and more importantly the market conditions," the governor added.
Hai Yen
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