Vietnam central bank says it’s ready to intervene in forex market; dong now at record low against dollar

HANOI (Bloomberg): Vietnam’s central bank said officials are prepared to intervene in the foreign-exchange market as the currency fell to a record low.

Intervention is possible "even today, if needed,” State Bank of Vietnam Deputy Governor Dao Minh Tu said at a briefing in Hanoi on Friday.

The dong dropped to a record-low 25,463 per dollar on the day.

The escalating conflict in the Middle East and expectations the Federal Reserve may delay interest-rate cuts is supercharging the dollar, and pummeling emerging-market currencies globally. Vietnam joins peers in Asia including South Korea and Indonesia in pushing back against the US currency’s strength.

"SBV will use tools such as intervening, and also raising short-term rates by withdrawing liquidity to make FX hedging costs more expensive,” said Michael Wan, senior currency analyst at MUFG Bank.

The daily dollar-dong reference rate had risen 0.7% this week, the most since 2015. -- ©2024 Bloomberg L.P.

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