Appropriate State Bank of Vietnam (SBV) policies helped it buy a large amount of US dollar (Photo: nld.com.vn) Hanoi (VNA) - Adoption of appropriate policies by the State Bank ofVietnam (SBV) has helped it buy a large amount of US dollar to increase thenation’s foreign reserves, industry insiders said.
Last week, commercial banks sold a significant amount of dollar to the centralbank after the latter used futures trading tools to buy foreign currencies andreduced its buying price for the greenback for three consecutivesessions. Vneconomy.vn reported that the central bank purchased asmuch as some 1 billion USD just in one day at the beginning of last week.
With the futures trading tools, commercial banks can sell the foreign currencyto the central bank in the future at the current price, without worrying aboutprices going down later.
The central bank’s purchase has also created more choice for commercial banksso that they can be more active in balancing foreign currency flow and capitaldemand.
The buying price for the greenback at the central bank’s head transactionsoffice on October 10 was quoted at 22,720 VND per USD, down 5 VND from thefixed price set in end-June and 20 VND below the upper limit of 23,121 VND.
This is the first time the central bank has made such a move since it initiateda new fixing mechanism for the USD/VND rate in January 2016.
Since the start of this year, the bank has raised the buying price threetimes-- in January, April and June.
Meanwhile, the bank continues to keep its selling price of the dollar 20 VND belowthe ceiling, indicating it is ready to intervene in the market and keep theUSD/VND steady until the end of this year.
According to experts, it is not a random move. The aforementioned decision onadjustment came after a nine-month trade surplus was fixed. Vietnam not onlyoffset the cumulative trade deficit since the beginning of the year butreturned to remarkable surplus. Foreign investment in Vietnam had highdisbursement rate and foreign currency continued to increase.
In the world market, the US dollar strongly depreciated and prior to that wasthe Fed’s decision on not to increase interest rates. Meanwhile, with regard tothe reference basket on the basis of which Vietnam is calculating exchangerate, many currencies got stronger, specially the Chinese yuan.
In the banking system, foreign currency status accumulated and was relativelypositive in the last three months, partly reflecting the reality that the VND-USDinterest rate swap has been in negative status for a long time. Therefore, thecentral bank decided to create a new operating rhythm, promoting the defreezeof those accumulated resources.-VNA
Last week, commercial banks sold a significant amount of dollar to the centralbank after the latter used futures trading tools to buy foreign currencies andreduced its buying price for the greenback for three consecutivesessions. Vneconomy.vn reported that the central bank purchased asmuch as some 1 billion USD just in one day at the beginning of last week.
With the futures trading tools, commercial banks can sell the foreign currencyto the central bank in the future at the current price, without worrying aboutprices going down later.
The central bank’s purchase has also created more choice for commercial banksso that they can be more active in balancing foreign currency flow and capitaldemand.
The buying price for the greenback at the central bank’s head transactionsoffice on October 10 was quoted at 22,720 VND per USD, down 5 VND from thefixed price set in end-June and 20 VND below the upper limit of 23,121 VND.
This is the first time the central bank has made such a move since it initiateda new fixing mechanism for the USD/VND rate in January 2016.
Since the start of this year, the bank has raised the buying price threetimes-- in January, April and June.
Meanwhile, the bank continues to keep its selling price of the dollar 20 VND belowthe ceiling, indicating it is ready to intervene in the market and keep theUSD/VND steady until the end of this year.
According to experts, it is not a random move. The aforementioned decision onadjustment came after a nine-month trade surplus was fixed. Vietnam not onlyoffset the cumulative trade deficit since the beginning of the year butreturned to remarkable surplus. Foreign investment in Vietnam had highdisbursement rate and foreign currency continued to increase.
In the world market, the US dollar strongly depreciated and prior to that wasthe Fed’s decision on not to increase interest rates. Meanwhile, with regard tothe reference basket on the basis of which Vietnam is calculating exchangerate, many currencies got stronger, specially the Chinese yuan.
In the banking system, foreign currency status accumulated and was relativelypositive in the last three months, partly reflecting the reality that the VND-USDinterest rate swap has been in negative status for a long time. Therefore, thecentral bank decided to create a new operating rhythm, promoting the defreezeof those accumulated resources.-VNA
VNA
