All commercial banks had cut their rates by 30 to 40 dong per US dollar yesterday, compared with the rates fixed earlier this week. — File Photo

HA NOI (Biz Hub) — The foreign exchange (forex) market cooled down yesterday after the State Bank of Viet Nam (SBV) committed to keeping the exchange rate stable.

All commercial banks had cut their rates by 30 to 40 dong per US dollar yesterday, compared with the rates fixed earlier this week.

Vietcombank listed the rate at VND21,465/21,525, down 40 dong.

BIDV and Vietinbank also cut the rate by 35 dong to VND21,465/21,525 and VND21,475/21,535.

Eximbank and ACB also adjusted their rates down by 30 dong to VND921,450/21,530.

The inter-bank exchange rate yesterday remained at VND21,458, while the rate quoted at the central bank's transaction offices was also kept stable at VND21,350/21,600.

SBV Deputy Governor Nguyen Thi Hong said the central bank had no plans to adjust the exchange rate for now, adding that there was no need to worry about recent developments in the forex market.

Hong reiterated that forex rates would be adjusted by no more than 2 per cent this year as part of a pledge made by Governor Nguyen Van Binh in December last year.

In January, the SBV had devalued the dong by 1 per cent from VND21,246 to VND21,458 per US dollar, the first exchange rate adjustment since June 2013.

Though the US dollar recently rose against the dong, it was still far below the cap of VND21,673 per dollar set by the central bank and the currency market was still seeing normal operations, Hong said, adding that the central bank had not felt the need so far to sell the greenback and intervene in the market.

Hong attributed the recent increase in the forex rates in the domestic market mainly to psychological factors, following the appreciation of the greenback in the world market.

For the past week, as the forex rate increased roughly VND120 against the previous weeks, some suggested that the central bank should further depreciate the dong to back domestic goods and support exports.

They said that the rise in value of the greenback in the global market had driven a series of central banks around the world to devalue their currency.

However, Hong said, the greenback had only risen strongly against key currencies, such as the euro, British pound and Canadian dollar, with whom Viet Nam's trading was not extensive.

She said keeping the exchange rate unchanged at the moment was more beneficial than devaluing the dong, because 90 per cent of the material for Viet Nam's exports was purchased from abroad.

Therefore an increase in the value of the US dollar would hurt exporters since input costs would escalate, especially as demand for imported materials was rising, Hong explained.

She said despite posting a trade deficit of US$1.75 billion during the first three months of 2015, the Vietnamese economy still enjoyed a balance of payments surplus of $2.8 billion, owing to funds from remittances and foreign investment capital. — VNS