Illustrative image (Source: VNA) Hanoi (VNA) – The reference exchange rate saw a rise in recent days after stayingflat for several months, leading experts to say domestic economic factors plusflexible management by the State Bank of Vietnam (SBV) would stabilise themarket.
Thereference exchange rate was set at 22,602 VND/USD by the central bank on June19 morning. The rate has been maintained for two consecutive sessions, and thesecond highest rate since the beginning of this year, compared with 22,605VND/USD on May 19.
LeQuang Trung, Deputy Director of the Vietnam International Commercial JointStock Bank (VIB), said the hike was mainly due to external factors.
Trungexplained that the US dollar rose sharply after the US Federal Reserves (Fed)decided to raise interest rates. Besides, other currencies in the SBV’s basketalso surged, resulting in the increase of the VND/USD rate.
Hesaid the higher reference exchange rate has aided Vietnam’s exports.
NguyenDuc Hung Linh from Saigon SecuritiesIncorporated (SSI) said the reference exchange rate setby the SBV increased 27 VND/USD compared with the rate before June 12, two daysahead of the Fed’s interest rate hike. Meanwhile, official rates listed atcommercial banks also inched up about 20 VND/USD.
Experts said the Fed’s increase of interest rates will not greatlyaffect foreign capital flow to Vietnam.
Ngo Dang Khoa from the Hong Kong-Shanghai Banking Corporation (HSBC) inVietnam said the Fed’s interest rate adjustment will not pose significantimpacts on foreign direct investment in Vietnam as it is long-term capital.
It mainly impacts short-term interest rates while long-termones still stand at 2.8 percent. Meanwhile, major investors in Vietnam mainlycome from the Republic of Korea (RoK), who are not overly sensitive to USinterest rates.
The VND/USD rate has also had little effect on remittances toVietnam because the increase is not too high, Khoa said.
Trung said the VND/USD rate will remain stable until the endof this year and the value of Vietnam dong may lose 1-2 percent, although theFed plans to adjust interest rates up two times from now till the end of 2018.
Pham Thanh Ha, head of the Policy and Monetary Department ofthe SBV, told a recent press conference that the central bank will manage thereference rate flexibly in conformity with developments of the market.
The bank will also scale up foreign reserves when necessary,Ha said.-VNA
VNA
