Economic experts agreed with the State Bank of Vietnam (SBV)’s adjustment to the exchange rate between Vietnamese dong and the United States dollar, calling it a necessity.

On May 7, the SBV increased the exchange rate between Vietnamese dong and the US dollar up one percent from 21,458 to 21,673.

A representative of the SBV explained the increasing trend in the exchange rate over the last few days has been mainly driven by psychological factors and market expectations.

According to banking and financial expert Nguyen Tri Hieu, the SBV’s adjustment was killing two birds with one stone: reducing risks for management agencies and increasing currency reserves.

It also helps stabilise the market and mitigate psychological behaviours, he said.

Hieu said the adjustment will inevitably have some impacts on the macro-economic market, such as increasing imported goods, affecting interest rates and driving inflation up.

According to a representative from the HSBC bank, the exchange rate change is an active move to narrow the trade deficit and control a slight depression in Vietnam’s balance of payments.-VNA