Illustrative image (Source: Vietcombank)

Hanoi (VNA) – The recent increase in the VND/USD exchange rate was due to inside and outside impacts such as some poor sessions in the domestic stock market and the USD price rise globally, according to Pham Thanh Ha, head of the State Bank of Vietnam (SBV)’s Monetary Policy Department.

Ha added that the USD interest rate in the interbank market rose in line with the world trend, while the VND interest rate remained low, resulting in a minus difference in VND-USD interest rate.

Commenting on the exchange rate and foreign currency market so far this year, Ha said both were stable in the first five months thanks to factors like trade surplus, high disbursement of foreign direct investment, big deals with high foreign indirect investment and the stable USD Index.

Amidst abundant foreign currency supply, the SBV purchased a large amount of foreign currency to increase reserves, contributing to increasing national monetary security and the capacity to intervene in the foreign currency market if necessary.

Since late May, market liquidity has been ensured, while foreign currency transactions were smooth, stated Ha.

Ha affirmed that the SBV will continue monitoring domestic and world markets, with consideration of the roadmap and impacts of the increase in interest rate of the US Federal Reserve Bank and its impacts, as well as US-China relations, moves of Eropean Central Banks and Japan’s central bank and domestic foreign currency supply.

The SBV will also continue applying measures and currency policy tools, while staying ready to sell foreign currency to intervene in the market.

“If necessary, the SBV will sell foreign currency with lower price than the current price to stabilise the market, contributing to keeping the macro-economy steady,” stated Ha.-VNA