PM Nguyen Xuan Phuc was at a group meeting of the National Assembly on May 22. (Photo chinhphu.vn) Hanoi (VNA) - Vietnam’s foreign reserveshas increased by 130 percent to nearly 64 billion USD in the pasttwo-and-a-half years, Prime Minister Nguyen Xuan Phuc has said.
Ata group meeting of the National Assembly on socio-economic affairs on May22, PM Phuc said the exchange rate has been also stable and inflation has keptunder control.
Expertsattributed the stability to factors such as the State Bank of Vietnam (SBV)’sflexible central rate management mechanism, which ensured that the domesticforeign exchange market was less affected by global factors.
Inaddition to this, the domestic supply-demand relationship with the dollar wasrelatively stable, thanks to foreign currency supply from exports, foreigninvestment, official development assistance, tourism and remittances.
The SBV affirmed it would continuously tryto build up the country’sforeign reserves this year to cushionexternal shocks, besides supporting efforts to stabilise the forexmarket.
FitchRatings recently also forecast that Vietnam’s foreign reserves would increaseto about 66 billion USD by the end ofthis year from 49 billion USD in 2017.
Thisyear, the SBV has changed its way of purchasing foreign currency. Instead ofusing spot trade, the central bank has used futures contracts for the purchaseof hard currencies since February 7 this year.
Previously,the bank used to buy foreign currency in spot trade, with volumes reaching 1-3billion USD per day, meaning that an equivalent volume of Vietnamese dong waspumped into the market in a short time.
Butsince February, the bank has launched three-month futures contracts to regulatethe flow of currency in a more flexible way. Some 40 percent of the foreignreserves has been purchased through futures contracts, helping to balance cashflows to moderate the pressures on interest rates, USD/VND exchange rate andinflation.-VNA
Ata group meeting of the National Assembly on socio-economic affairs on May22, PM Phuc said the exchange rate has been also stable and inflation has keptunder control.
Expertsattributed the stability to factors such as the State Bank of Vietnam (SBV)’sflexible central rate management mechanism, which ensured that the domesticforeign exchange market was less affected by global factors.
Inaddition to this, the domestic supply-demand relationship with the dollar wasrelatively stable, thanks to foreign currency supply from exports, foreigninvestment, official development assistance, tourism and remittances.
The SBV affirmed it would continuously tryto build up the country’sforeign reserves this year to cushionexternal shocks, besides supporting efforts to stabilise the forexmarket.
FitchRatings recently also forecast that Vietnam’s foreign reserves would increaseto about 66 billion USD by the end ofthis year from 49 billion USD in 2017.
Thisyear, the SBV has changed its way of purchasing foreign currency. Instead ofusing spot trade, the central bank has used futures contracts for the purchaseof hard currencies since February 7 this year.
Previously,the bank used to buy foreign currency in spot trade, with volumes reaching 1-3billion USD per day, meaning that an equivalent volume of Vietnamese dong waspumped into the market in a short time.
Butsince February, the bank has launched three-month futures contracts to regulatethe flow of currency in a more flexible way. Some 40 percent of the foreignreserves has been purchased through futures contracts, helping to balance cashflows to moderate the pressures on interest rates, USD/VND exchange rate andinflation.-VNA
VNA
