SBV takes more actions to stabilise foreign exchange rates

Illustrative image (Photo: VNA)

Hanoi (VNA) – The State Bank of Vietnam (SBV) on April23 took some moves like issuing treasury bills (T-bills), further employingT-bills as an open market operation (OMO), and stipulating liquidity andinterest rates in the inter-bank market in the face of surging USD/VND exchangerates.

The central bank lent nearly 36 trillion VND (1.4 billion USD) for a 14-day term to ninemembers via the OMO channel. The bid-winning interest rate rose to 4.25% peryear from 4% per year as recorded recently.

The seven-day loan, issued on April 16 via the OMO channel,also matured on April 23 with total value approximating 12 trillion VND.

The bank also continued to issue 2.15 trillion VNDworth of 28-day T-bills with an interest rate of 3.73%. Two members won thebidding.

Besides, the T-bills issued on March 26 also became mature onApril 23, enabling the central bank to inject 3.7 trillion VND back to themarket.

Experts said the maintenance of inviting bids forT-bills will help the SBV form a steady zone of floor prices for inter-bankinterest rates via bid-winning rates. The concurrent use of T-bills and OMOaims to serve the twin targets of guaranteeing liquidity for the banking systemto maintain low interest rates in the market and easing pressure to narrow the USD/VNDexchange rate differences in the inter-bank market.

Talking to the press, Tran Duc Anh, Director formacro-economy and market strategy at the KB Securities Vietnam JSC, held thatthe SBV has carried out many measures for stabilising exchange rates likeattracting money flows via T-bills in the open market.

However, such moves are still not strong enough to stabilise foreignexchange rates as inter-bank interest rates keep growing. Therefore, the bank may take stronger interventions in the time ahead, he opined.

SBV Deputy Governor Dao Minh Tu affirmed that exchange rates forma critical factor in macro-economic governance. They affect notonly the value of the Vietnamese dong or people’s purchasing demand but also policies,macro-economic stability, inflation control, market psychology, and investors’trust.

Therefore, the SBV always views stipulatingexchange rates as one of the extremely important tasks, he said, noting that itwill continue flexible governance to ensure exchange rates changes in line withthe common trend and the foreign currency balance is guaranteed for legaldemand in the market.

On April 23, the central bank set the daily referenceexchange rate at 24,275 VND per USD, up 3 VND from the previous day./.

VNA