Illustrative image (Photo: plo.vn) Hanoi (VNS/VNA) - Experts haveforecast minimal pressure on exchange rates in 2019, with little chance ofsignificant volatility.
According to a recent report by SSI SecuritiesCorporation, the continued devaluation of Chinese yuan could pressure theVietnamese dong. However, afterovercoming the most difficult period – beginning of the US-China trade war,market members and management agencies are now prepared.
The company predicted the volatility of the USdollar against the Vietnamese dong would be the same as 2018 with little chance for suddenvolatility.
The Vietnamese dong lost about 2.3 percent against the USdollar in 2018, much lower than the losses of euro, sterling and yuan whichwere respectively at 4.5 percent, 5.7 percent and 5.4 percent.
According to MB Securities Joint StockCorporation, the forex market would still be under pressure from US FederalReserve’s plan to raise rates but the pressure would not be too huge thanks tothe Vietnam’s abundant foreign currency reserves, which are estimated at around63.5 billion USD.
The company said large US dollar supply and astable macro-economic situation would enable the State Bank of Vietnam tomanage exchange rates flexibly.
In addition, the policy of zero interest ratefor deposits in US dollars which encourage people to sell US dollars and holdVietnamese dong would create roomfor the central bank to maintain the exchange rate at a reasonable level.
MB Securities forecast that the exchange ratebetween the Vietnamese dong andUS dollar would increase slightly by 1.5-2 percent in 2019.
Financial and banking expert Nguyen Tri Hieusaid the US dollar would continue to strengthen against the Vietnamese dong because of the impacts of the US-China trade waron global trade together with expectations about more Fed rate hikes in 2019.
Economist Can Van Luc said the US economicgrowth was expected to slow down in 2019 and the Fed would slow its rate hikes.
The Vietnamese dong would depreciate by around 2.5-3 percent againstthe US dollar in 2019, Luc forecast.
The State Bank of Vietnam said that it wouldkeep a close watch on macro-economic developments and financial and monetarymarkets to intervene when necessary to stabilise the markets.-VNS/VNA
VNA
