A transaction office of VietinBank (Photo: VNA) Expert Nguyen Tri Hieu said when FED continues to hike interestrates, exchange rates in Vietnam will also go up accordingly. The USD/VNDexchange rate has climbed due to the appreciation of the US dollar, which isfavourable for export but unfavourable for import.
Expert Dinh Trong Thinh held that facing the FED moves, thefirst and foremost thing is to keep macro-economic stability, with monetarystability being the core. If the USD/VND exchange rate is maintained at anappropriate level, core inflation will stay low, thus curbing goods price hikesand ensuring that the consumer price index (CPI) will grow at a slow pace fromnow to the year’s end and even the following years.
To maintain appropriate exchange rates, the State Bank ofVietnam (SBV) has been making interventions through different measures,including selling the US dollar. With relatively abundant forex reserves, theSBV has sufficient resources to intervene in the market to sustain appropriate exchangerates.
In the long term, the US dollar value will become stablesoon, Thinh said, noting that appropriate exchange rates will ensure stablecore inflation, thus completely enabling the achievement of keeping overallinflation at less than 4% and ensuring economic growth.
The Vietnamese dong’s daily reference exchange rate against theUS dollar has soared by 7% compared to the end of 2021, which means the donghas lost its value by 7%. However, the depreciation in comparison with the USdollar is the common trend among currencies in the world, and in fact, theVietnamese dong is recording less depreciation.
SBVGovernor Nguyen Thi Hong said the international situation is causing pressureon not only Vietnam but also all countries around the world. In the recentpast, the SBV has made highly proactive and timely response, and thanks to that,the market has seen positive developments and market psychology has been stabilised.
In the time to come,one of the important issues is that the SBV, as well as ministries and sectors,have to stay proactive, increase forecasting and analysis, continually update themselveswith new changes so as to ensure proactive governance, and harmoniously coordinateexisting policies.
ThePrime Minister has ordered public investment be strongly promoted and anexpanded and focus-driven fiscal policy be implemented, which will easepressure on the banking system’s credit, according to Hong.
TheSBV will stay persistent in the monetary governance measures aimed at stabilisingthe macro-economy, but “stable doesn’t mean fixed”, she said, adding that it will keep aclose watch on every development to take appropriate actions.
The central bankwill govern foreign exchange rates in a way that concurrently makes room forthe rates to fluctuate flexibly and absorb external shocks, and intervenes inthe forex market to minimise exchange rates’ excessive fluctuations, therebyhelping stabilising the forex market, according to the official./.
VNA
