BIDV predicts forex market uncertainty in the long term
The foreign exchange market might face uncertainty with relatively
increased pressure in the medium and long term, according to a research
group of the Bank for Investment and Development of Vietnam (BIDV).
The foreign exchange market might face uncertainty with relatively
increased pressure in the medium and long term, according to a research
group of the Bank for Investment and Development of Vietnam (BIDV).
The research group forecast that the foreign exchange rate might reach 21,850 VND against the dollar by the end of the second quarter, 40 VND away down from the ceiling rate, reported the website vneconomy.vn, adding that no huge fluctuations are expected to occur within this month.
The exchange rate would hardly fall dramatically unless supply of foreign currency supply increased, according to researchers.
The news website reported that from the beginning of June, the State Bank of Vietnam started to sell the dollars and issue treasury bills to ease tensions in the forex market after the dollar rates showed a huge increase last month.
On May 7, the central bank raised inter-bank rate by 1 percent for the second time this year to 21,673 VND per dollar, leaving no room for any adjustment this year as it had earlier committed not to weaken the dong by more than 2 percent in 2015.
On May 27, the central bank's Deputy Governor Nguyen Thi Hong signalled that the central bank could sell the dollars if necessary, which help calm the forex market.
The research group predicted that the exchange rates would fluctuate around 21,800 VND and 21,820 VND this month and around 21,700 VND and 21,890 VND in the third quarter of this year.
According to a market report by BIDV Securities, 1 percent adjustment of VND/USD rate in May would help boost exports and improve competitiveness of Vietnamese products.
However, the report said that attention should be paid to changes in the world market, especially the possibility of rate rises by Federal Reserve System (Fed).
In Fed raised rates, the greenback would become stronger which would create pressure on the forex market of Vietnam.
Although Vietnam ran a trade surplus in the first few months of this year, the central bank forecast that overall balance of payments would post a surplus for the full year.-VNA
The research group forecast that the foreign exchange rate might reach 21,850 VND against the dollar by the end of the second quarter, 40 VND away down from the ceiling rate, reported the website vneconomy.vn, adding that no huge fluctuations are expected to occur within this month.
The exchange rate would hardly fall dramatically unless supply of foreign currency supply increased, according to researchers.
The news website reported that from the beginning of June, the State Bank of Vietnam started to sell the dollars and issue treasury bills to ease tensions in the forex market after the dollar rates showed a huge increase last month.
On May 7, the central bank raised inter-bank rate by 1 percent for the second time this year to 21,673 VND per dollar, leaving no room for any adjustment this year as it had earlier committed not to weaken the dong by more than 2 percent in 2015.
On May 27, the central bank's Deputy Governor Nguyen Thi Hong signalled that the central bank could sell the dollars if necessary, which help calm the forex market.
The research group predicted that the exchange rates would fluctuate around 21,800 VND and 21,820 VND this month and around 21,700 VND and 21,890 VND in the third quarter of this year.
According to a market report by BIDV Securities, 1 percent adjustment of VND/USD rate in May would help boost exports and improve competitiveness of Vietnamese products.
However, the report said that attention should be paid to changes in the world market, especially the possibility of rate rises by Federal Reserve System (Fed).
In Fed raised rates, the greenback would become stronger which would create pressure on the forex market of Vietnam.
Although Vietnam ran a trade surplus in the first few months of this year, the central bank forecast that overall balance of payments would post a surplus for the full year.-VNA
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