The State Bank of Vietnam (SBV) has bought in another US$1.5 billion worth of hard currencies over the past month.
Previously, SBV Governor Le Minh Hung told National Assembly deputies on November 16 during a plenary session that the bank had increased its buffer fund by US$7 billion in 11 months to bring the sum to a record high of US$45 billion.
The rise was reported in the context of the foreign exchange rate in the domestic market being relatively stable. It is estimated that the daily reference VND/
USD exchange rate listed by the central bank in the first nine months increased by 1.4 per cent against earlier this year, while the rate in the unofficial market declined by 1.5-1.7 per cent.
The central bank has bought in another US$1.5 billion worth of hard currencies over the past month.
According to the central bank, the liquidity of the domestic foreign exchange market was good and met the demands of local organizations and individuals.
It is noteworthy that the USD/VND rate has undergone little changes although the US Federal Reserve raise its benchmark interest rates by 0.25 percentage points for the third time this year. A few years ago, the exchange rate usually fluctuated widely towards the year-end due to seasonal factors.
Experts attributed the stability to reasons such as the SBV’s flexible central rate management mechanism, which ensured that the domestic foreign exchange market was less affected by global factors.
The government’s policy to encourage locals to convert forex holdings into VND, the local currency, has provided support. The SBV has net purchased $8 billion to $8.5 billion worth of forex since the start of this year, higher than a surplus of $4.8 billion in overall balance of payments.
Besides this, the domestic supply-demand relationship with the dollar was relatively stable. Foreign currency supply from exports, foreign direct investment (FDI), official development assistance (ODA) disbursement, tourism and remittances had grown positively in 2017, the experts said.
Vietnam recorded a trade surplus of US$2.76 billion in the 11 months of the year, or 1.4 percent of total export turnover, according to the Ministry of Industry and Trade (MoIT). The total export value during the reviewed period was US$193.75 billion and that of imports was US$190.99 billion, up 21.1 percent and 21 percent year-on-year, respectively.
The country’s total foreign direct investment (FDI) capital in the period also reached a record high of US$33 billion, up 82.8 per cent against the same period last year, while FDI disbursement capital also rose by 11.9 percent to US$16 billion.