The State Bank of Vietnam (SBV) purchased roughly 7.7 billion USD worth of foreign currency for the national foreign exchange reserve in the first quarter this year thanks to stable foreign exchange rates, SBV Governor Nguyen Van Binh said.

The purchase had enriched the national forex reserve, which was reported to be more than 30 billion USD at the end of last year, and would help stabilise the forex rate, he said.

However, Binh noted that increasing foreign exchange reserves put a large amount of pressure on the Vietnamese dong, because the goal was to inject money without causing inflation and foreign exchange rate fluctuations.

The exchange rate between the Vietnamese dong and the US dollar quoted at local commercial banks on April 1 was stable at 21,075-21,085 VND and 21,115-21,125 VND to the dollar for bid and ask, respectively.

The interbank rate quoted at SBV transaction offices has remained unchanged at 21,036 VND to the dollar from late June last year.

Binh said that in the first quarter of this year, monetary and gold markets were also stable.

He said that the monetary market had shown positive signs after nearly a month of interest rate cuts. Although the deposit interest rate for 1-6 month terms was cut to 6 percent from 7 percent last month, bank deposits had risen sharply. Lending rates for corresponding terms were also cut by 0.5-1 percent, he said.

Binh added that lending in March was up 1 percent month on month.

With increased lending in March, Binh said he was unconcerned about credit growth this year, adding that he expected the 12-14 percent annual credit growth target to be achieved.-VNA