Foreign reserves hit record high (illustrative photo - Source: baodautu.vn) Hanoi (VNA) – The State Bank of Vietnam (SBV) continues to build up itsforeign exchange reserves to cushion external shocks, raising the fund to a newrecord high of more than 57 billion USD till February 6.
According to SBV Governor Le Minh Hung, SBV’s net purchase of hard currenciesthis year has been worth more than 4 billion USD.
SBV affirmed it would continuously try to increase the country’s foreignreserves this year, besides supporting efforts to stabilise the forex market.
Experts have so far been optimistic about the foreign exchange market in 2018,noting that the market would be stable, with the Vietnamese dong devaluingslightly by some 0.5-1 percentage points to 22,710-22,950 VND.
According to the Bank for Investment and Development of Vietnam’s capital andmonetary research division, the country’s overall balance of payment canmaintain a healthy surplus of some 8-10 billion USD this year, which isimportant for the stability of the forex market.
The good balance of payment is expected due to a predicted trade surplus thisyear, while the remittance inflow is likely to inch by 5 percent to some 10.5billion USD.
Foreign direct and indirect investment capital inflows are also anticipated tomaintain high growth, owing to improvement in the business environment of thecountry, the division said, forecasting the disbursement of capital sourcecould reach 21-23 billion USD this year.
Last year, the SBV also successfully made a net purchase of 13 billion USD,raising the forex fund to 53 billion USD, the highest ever.
Bloomberg reported last year that the Vietnamese dong was one of the moststable currencies in Asia in 2017.
Hung attributed the success to SBV’s insistence in monetary and foreigncurrency policies.
“The rising foreign reserves have contributed to strengthening Vietnam’sprestige and creating confidence in investors investing in the country,” hesaid.
According to him, liquidity of the domestic foreign exchange market last yearwas good and met the legal demands of local organisations and individuals.
Thanks to the high foreign reserves, domestic commercial banks on February 8continued devaluing the US dollar against the Vietnamese dong for the secondconsecutive session, despite a rise of the greenback in the global market.
The decline was seen in the context of the country’s abundant dollar supplysource, while having no demand pressure.
State-owned Vietcombank on February 8 afternoon listed the dollar at 22,650 and22,720 VND for buying and selling, respectively, down 10 VND against theprevious day and 25 VND from February 5.
BIDV also cut the buying and selling rate by 25 VND and 15 VND to quote thedollar at 22,650 VND and 22,730 VND, respectively, while the decreasing rate atVietinbank is 9 VND to 22,652 VND for buying and 22,722 VND for selling.
The same move was also seen at joint stock commercial banks, with a decrease of15-25 VND per dollar.
ACB devalued the dollar by 20 dong against the previous day to 22,650 VND forbuying and 22,720 VND for selling, while Techcombank listed it at 22,650 VND and22,740 VND for buying and selling, respectively.
The State Bank of Vietnam on February 8 also set the daily reference exchangerate at 22,435 VND per dollar, down by 10 VND from the previous day.
With the current trade band of +/- 3 percent, the ceiling rate applied tocommercial banks during the day is 23,108 VND and the floor rate is 21,762 VND.
In the global market, the dollar was supported after a budget deal inWashington, rising against a broad range of currencies. US congressionalleaders reached a two-year budget deal on Wednesday to raise governmentspending by some 300 billion USD. The dollar index rose to a two-week high of90.403 on February 7 and last stood at 90.251.-VNA
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