Central bank well set to keep forex rate under 2 pct: experts

Saturday, Jan 24, 2015 11:53

Many experts believe that SBV will succeed in keeping the VND-US dollar exchange rate below 2 per cent. – File Photo
HA NOI  (Biz Hub) — Experts said the State Bank of Viet Nam will succeed in keeping the Vietnamese dong-US dollar exchange rate from fluctuating to below 2 per cent this year.

Some have been concerned that the continuing sharp fall in oil prices, which is one of Viet Nam's key export staples, will negatively impact foreign currency supply and demand.

However, the deputy director of the Central Institute for Economic Management, Vo Tri Thanh said at a conference on Thursday that the central bank will successfully keep the foreign exchange rate from fluctuating to below 2 per cent, owing to supply and demand of the country's foreign currency sources, as well as the central bank's competence in successfully managing the forex market for the past few years.

Thanh added that Viet Nam's foreign currency reserves have currently hit a record high of roughly US$35 to 38 billion, while balance of payments this year are forecast to have reported a surplus of roughly $7 to 8 billion.

However, Thanh noted that it will be important to see how the central bank adjusts the rate to stabilize the forex market, while avoiding negatively affecting other indices.

The Bao Viet Securities Co. (BVSC) also forecast this week that the forex market will remain stable in 2015 as well.

The securities company anticipates the exchange rate of the dong against the dollar to vary between VND21,600 and VND21,800 till the end of this year.

The forex market will still experience ‘rising waves.' However, the central bank will successfully intervene to keep the exchange rate fluctuation within the set target.

Trust in the central bank's successful policies formulated over the last two years has also helped the central bank execute its policies more effectively, BVSC said.

However, BVSC said the central bank could consider the devaluation of the dong against the dollar and implement the devaluation with a certain timeline, in a bid to boost the competitiveness of Vietnamese exports. — VNS

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