The SBV early this week resumed issuing bills on the open market operation channel after about four months of pause. — Reuters
HANOI: The US dollar’s exchange rate in both official and unofficial markets has cooled down after the State Bank of Vietnam (SBV) intervened to reduce speculation on the greenback in the domestic market.
The SBV early this week resumed issuing bills on the open market operation channel after about four months of pause.
Specifically, on March 11 it issued nearly 15 trillion dong of 28-day government bonds with an interest rate of 1.4% per year.
In the next session of March 12, the SBV continued to issue bonds worth nearly 15 trillion dong with a term of 28 days and an interest rate of 1.4% per year, raising the total value withdrawn from the banking system to nearly 30 trillion dong.
According to experts, the move is aimed at supporting the foreign exchange rate, which has been under rising pressure recently, as the bond issuance has helped absorb liquidity in the interbank market to increase Vietnamese dong-denominated interest rate, which has reduced the US dollar speculation in the short term.
Right after the SBV’s move, the foreign exchange rate on both official and unofficial markets cooled significantly.
Specifically, on the official market, Vietcombank on March 13 listed the US dollar at 24,450 dong per US dollar for buying and 24,820 dong per US dollar for selling, down about 40 dong per US dollar compared to last weekend.
On the unofficial market, the US dollar also turned down. The US dollar buying price on March 13 was 25,480 dong, down about 20 dong compared with March 12, while the US dollar selling price dropped sharply by 100 dong to 25,600 dong per US dollar.Previously, the US dollar selling price in the unofficial market reached 25,700 dong per US dollar, an increase of 1,000 dong compared to the end of 2022, equivalent to an increase of 4%.
Despite the appreciation of the US dollar against the dong in the first months of this year, experts believe Vietnam still has effective tools to proactively control the dong-US dollar exchange rate in 2024.
Economist Pham The Anh, head of the National Economics University’s Economics Department, said Vietnam can still be proactive with the exchange as the country has the advantages of a large surplus trade balance and relatively positive foreign direct investment (FDI) disbursement.
In 2023, Vietnam’s trade balance of goods had a surplus of more than US$28bil, while FDI disbursement also set a record high of more than US$23bil, both favourable factors for the SBV to increase the nation’s foreign exchange reserves.
In 2024, production will gradually recover so imports will likely grow a bit faster than exports, but in general, the overall balance will still help Vietnam take the initiative to regulate the dong-US dollar exchange rates, Anh forecast.
According to estimates of VNDirect Securities Co’s analysts, Vietnam’s foreign exchange reserves are quite abundant, at about US$95 bil to US$96bil, creating room for the SBV to respond if the US dollar index increases. — Viet Nam News/ANN
