Fri. May 27th, 2022

The State Bank of Vietnam (SBV) has recently adjusted the VND/USD
exchange rate up by one percent. The adjustment has received a positive
response and boosted confidence, the Vietnam Economic News reported.

The
average interbank exchange rate was adjusted to increase from 21,036
VND to 21,246 VND per USD. Together with exchange rate adjustment,
ceiling and floor levels reach 21,458 VND and 21,034 VND per USD,
respectively.

SBV decided to adjust exchange rate after
carefully considering macroeconomic factors. According to SBV’s Monetary
Policy Department Director Nguyen Thi Hong, since the beginning of this
year, macroeconomics, monetary market and banking activities have made
positive developments.

Inflation has been curbed at a low level,
while the consumer price index (CPI) just increased by 0.2 percent in
May compared to April or an increase of 1.08 percent compared to
December 2013. In particular, foreign exchange market has been
guaranteed.

“In the context of controlled CPI at a low level in
the first five months of this year and stable exchange rate for nearly a
year, exchange rate adjustment will contribute to promoting exports and
supporting economic growth,” Hong was quoted as saying.

In
addition to macroeconomic factors, the stable situation in the monetary
and foreign exchange market has made an adjustment. According to SBV, in
the first five months of this year, trade surplus totaled 1.6 billion
USD and overall balance of payment surplus reached more than 10 billion
USD. In particular, foreign exchange reserves reached a record of 35
billion USD.

Central Institute for Economic Management (CIEM)
Deputy Director, Dr. Vo Tri Thanh said that the transparency of
information on the overall balance of payments and foreign exchange
reserves had helped create a trust for the market, contributing to
reinforcing the value of the VND.

He also added that signs of
stress on the foreign exchange market were often expressed by the
difference between the exchange rate on the free market and banks.
However, by tracking actual transactions after exchange rate adjustment,
there were no signs of stress on the foreign exchange market.

SBV
will implement measures and tools to stabilise the exchange rate and
the foreign exchange market. While inflation is controlled at a low
level, decision on exchange rate adjustment will contribute to promoting
exports and supporting economic growth in the second half of this year.

SBV
Governor Nguyen Van Binh said that exchange rate adjustment would not
exceed two percent. Many suggestions showed that the exchange rate would
continue to be adjusted in the remaining months of this year. However,
Vo Tri Thanh said that if exports face to difficulties, SBV will
continue to adjust the exchange rate and the possibility of exchange
rate adjustment to two percent will reach about 40 percent.

SBV
will continue to flexibly operate monetary policy and closely coordinate
with fiscal policy to control inflation, stabilise macroeconomics and
support economic growth at a reasonable level, contributing to ensuring
safety for credit institutions. Nguyen Thi Hong said that SBV will adopt
appropriate measures, policies and tools to achieve set goals.-VNA

By vivian