The State Bank of Vietnam (SBV) has officially talked about the strong fluctuations of exchange rate in the recent time.
According to the SBV’s website, Pham Manh Ha, director of the Monetary Policy Department, from the end of April until now, the foreign exchange rate has tended to increase. Although the market sentiment is still not yet calmed, market liquidity is still ensured and legitimate foreign currency needs are fully and promptly met.
Previously, the SBV listed the spot buying rate at 23,200 dong per US dollar on January 2nd 2019. The exchange rate in the market from the beginning of the year until mid-April was fairly stable with good market liquidity, thanks to the fairly favourable movements in the international financial market and stable market sentiment and abundant foreign currency supply in the domestic market. In such context, the SBV managed to purchase a large amount of foreign currency to increase foreign exchange reserves, contributing to strengthening the national monetary security and increasing foreign currency market intervention when necessary.
Ha also explained that the exchange rate appreciation in the recent time was due to the recent information about the US-China trade negotiations which increased market concerns about the possibility of a negative international trade conflict. In addition, the depreciation of Chinese yuan in some days from the end of April has significantly influenced the sentiment of domestic foreign currency market, thereby putting pressure on the exchange rate.
Director of the Monetary Policy Department affirmed that in the near future, the SBV will continue to closely monitor domestic and foreign market movements, operate the central exchange rate flexibly and reasonably, continue to synchronously use monetary policy measures and tools to stabilise the foreign currency market.
If necessary, the SBV is ready to sell foreign currency to intervene with an appropriate selling rate in order to stabilise market, contributing to the macroeconomic stabilisation.
