SBV assurance calms foreign exchange fears

After hovering at the ceiling rate set by the State Bank of Vietnam for three days, the dollar pulled back a little on August 27 after the central bank promised no more devaluation is in the offing, with almost all banks reducing their selling rate by 25-35 VND.

The greenback had soared after the dong was recently devalued by 1 percent for a third time this year: With the inter-bank rate set at 21,890 VND, the wider daily trading margin of 3 percent meant the dollar shot up to 22,547 VND and remained there.

But on August 27, two days after the SBV assurance, most other lenders except Agribank cut their exchange rates.

The Technological Commercial Bank (Techcombank) sold at 22,540 VND while Vietcombank, Asia Commercial Bank, DongABank, VietinBank, and BIDV all sold at 22,510 VND.

The buying rates were between 22,410 VND and 22,480 VND.

Le Duc Tho, General Director of Vietinbank, said the exchange rate has stabilised, adding banks have been reassuring clients who fear further depreciation of the Vietnamese currency.

Phan Thanh Son, Director of Techcombank's Treasure and Markets said the SBV's reassurance has steadied the exchange rate and helped improve liquidity.

In the grey market too, the dollar has dropped.

Most money changers on Ha Trung street in Hanoi sold the dollar at 22,550-22,570 VND on August 27, as much as 100-150 VND down from August 24.-VNA