Log in
Business

No requests to purchase foreign currency at low price: SBV

The market supply of foreign currency is sufficient and self-adjusted to demand, according to the Vietnamese central bank.

The State Bank of Vietnam (SBV), the country's banking regulator, has not received any request from commercial banks to purchase foreign currency at low price, an unnamed SBV's high ranking official told VnEconomy on July 4.
 
Illustration photo.
Illustration photo.
Following a sharp increase of the USD selling price in the free market, Pham Thanh Ha, head of the Monetary Policy Department (SBV) on July 2 stated the SBV may sell foreign currency at a price lower than the current exchange rate, with the aim of stabilizing the macro-economy.

One day later, the SBV decreased the selling price of USD by 1% or VND244 (US$0.011) to VND23,050, which is VND264 lower than the ceiling level of the reference rate. 

However, at present, no commercial banks have contacted the SBV to purchase foreign currency.  According to the SBV official, the main reason is the self-adjusted market mechanism, which helps ensure smooth transactions of foreign currency, 

Furthermore, the official considered it is necessary to balance the inflow and outflow of foreign currency. For the last two years, the SBV has been a net buyer of foreign currency, with the aim of increasing the country's foreign exchange reserves. Thus the SBV is willing to sell if needed to balance the flow of foreign currency, the centrak banker noted. 

Additionally, this move will help SBV mobilize VND-denominated funds, instead of mainly issuing treasury bills. 

With regard to the Vietnamese dong, the official said the SBV will balance the amount of VND in circulation in the economy, which is vital to ease pressure on the exchange rate and inflation. 

Moreover, as the dong is under pressure to devalue following sharp depreciations of other currencies in the Asia-Pacific region, it is necessary for the SBV to intervene and minimize potential negative impacts on the macro-economy. 

Vietnam's stabilized marco-economy is considered the country's advantage compared to other countries with high volatility of exchange rate, said the official. Over the years, this has proved essential to attract foreign investment capital and creating a favorable business environment. 

Evidently, in the first six months of 2018, despite geopolitical uncertainty and volatility in global markets, Vietnam's stock market witnessed strong foreign cash inflows with foreign investors' net purchases reaching VND40.5 trillion (US$1.76 billion), according to the State Securities Commission of Vietnam (SSC). 

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.
Reactions:
Share:
Trending
Most Viewed
SSC launches Vietnam Governance Manual 2025

SSC launches Vietnam Governance Manual 2025

Vietnam targets 100% online processing of business-related procedures

Vietnam targets 100% online processing of business-related procedures

By 2026, corporate compliance costs must be halved compared to 2024, achieved through a 50% reduction in processing times.

Vietnam aims to create one million new businesses by 2030

Vietnam aims to create one million new businesses by 2030

Ministries and local governments are expected to cut at least 30% of processing times, compliance costs, and unnecessary business conditions this year.

Hanoi advances energy efficiency for businesses

Hanoi advances energy efficiency for businesses

Hanoi authorities, in collaboration with relevant agencies, are providing technical support to businesses in adopting advanced energy-saving technologies and developing energy efficiency indices.

Vietnamese spend US$13 million daily on coffee and tea

Vietnamese spend US$13 million daily on coffee and tea

Total revenue for the F&B industry is expected to reach VND755.4 trillion ($29.6 billion) this year.

Vietnam works to overcome US seafood export barriers

Vietnam works to overcome US seafood export barriers

Vietnam’s seafood industry is facing new trade barriers from the US under the Marine Mammal Protection Act (MMPA), which aims to reduce bycatch and promote sustainable fishing.

New IPO rules in Vietnam: How startups can raise capital faster?

New IPO rules in Vietnam: How startups can raise capital faster?

Unlocking capital flows would be crucial for the sustainable development of Vietnam's startup ecosystem.

Viettel to open new data center in Ho Chi Minh City next month

Viettel to open new data center in Ho Chi Minh City next month

Expected to be operational by 2026, the center will play a critical role in meeting the data storage and processing needs of southern Vietnam.