Vietnam central bank sells dollars in market as dong falls

  • Vietnam
  • Monday, 22 Apr 2024

Photo from Bloomberg

HANOI (Bloomberg): Vietnam’s central bank said it sold dollars to some banks, intervening in the foreign exchange market as the currency fell to a record low.

The "intervening price” was 25,450 dong per dollar, State Bank of Vietnam said in a statement released after an official said intervention was possible today. 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.

--With assistance from Nguyen Dieu Tu Uyen, Cecilia Yap and Malavika Kaur Makol. -- ©2024 Bloomberg L.P.

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