As calculated by an expert, Vietnam’s foreign currency reserves are now higher than the figures informed by the State Bank of Vietnam (SBV)’s governor Le Minh Hung, in the middle of last year.
Speaking at the press conference on monetary policy and banking operations management in Q1/ 2019, SBV’s deputy Governor Nguyen Thi Hong said that in the first 3 months of 2019, the foreign exchange rates and foreign markets were stable and supported by abundant foreign currency supply, good market liquidity and credit institutions continued to buy foreign currencies from customers. As a result, the SBV continued to buy foreign currencies to supplement the State’s foreign currency reserves.
Indeed, in the first months of 2019, although the central exchange rate was continuously adjusted up by the State Bank, the exchange rate in banks remained stable, while the black market exchange rate even decreased slightly.
Specifically, in the trading session on April 4, the central bank listed the central exchange rate at 22,978 dong/ USD, up 153 dong/ USD compared to the end of 2018. However, the buying and selling prices at banks were maintained as at the end of last year, at 23,14023,160 dong/ USD for buying price and 23,24023,260 dong/ USD for selling price. While the black market exchange rate is currently at 23,190 dong/ USD for buying and selling at 23,210 dong/ USD, down 50 dong in buying price and 60 dong in the selling price compared to the end of 2018.
According to a banking expert, the black market exchange rate continued to decline in the first months of this year due to the abundant supply of foreign currency. Accordingly, the trade balance of goods continued to surplus of about $500 million in the first quarter of this year after having a surplus of $6.8 billion in 2018. During this period, FDI disbursements also reached $4.12 billion, up 6.2 percent compared to the same period in 2018, FII capital through the capital contribution and share purchase activities amounted to $5.69 billion, three times higher than the same period in 2018. In addition, there is also a source of remittances and tourism income.
A source said, in Q1/ 2019, the USD/ dong exchange rate continued to be stable and the central bank net bought foreign currencies, with the purchase amount of about $2.5 billion, raising the scale of national foreign exchange reserves to exceeding $65 billion threshold. While another source quoted the macroeconomic report in Q1/ 2019 of BIDV Research Centre saying that the SBV actively raised the USD buying price by 500 dong to 23,200 dong/ USD, helping the manager buy about $6 billion in Q1/ 2019 to increase foreign exchange reserves.
The banking expert said that the amount of foreign currency that the SBV bought in the first quarter of the year was likely much higher than the figure of $2.5 billion that the first source said. Because according to the ministerChair of the government Office Mai Tien Dung at the regular government press conference in January 2019, the SBV bought an additional $4 billion in the first month of this year. Therefore, the figure of $6 billion announced by BIDV Research Centre seems more reasonable.
At the online conference between the government and localities in June 2018, the SBV’s Governor Le Minh Hung announced that the SBV has bought more than $11 billion to raise the foreign currency reserve to a record of $63.5 billion. However, after that, the SBV had to sell foreign currencies to stabilise the market. Therefore, the SBV’s net purchase of foreign currency in 2018 was only $6 billion.
The expert said that if the information of buying additional $6 billion in Q1/2019 as announced by BIDV Research Centre was correct, plus $6 billion in 2018, then from early 2018 till now, the SBV has bought a total of $12 billion, $1 billion higher than the number announced by the SBV’s Governor in the middle of last year. This means that Vietnam’s foreign exchange reserves may be currently around $64.5 billion.
