The State Bank of Viet Nam (SBV)’s Operations Centre has decided to adjust the reference exchange rate of the Vietnamese dong against the US dollar for the first time since February 2018.

The centre has raised its buying rate of the dollar against the dong for commercial banks by VND500 to VND23,200 per dollar starting on Wednesday. SBV uses the rate as a reference to buy US dollars from commercial banks.

It kept the selling rate unchanged at VND23,463 per dollar.

This was the first adjustment since February 8, 2018, when the centre lowered its buying rate by VND10 to VND22,700 per dollar.

The new rate is designed to keep balance with the SBV’s daily reference exchange rate (commercial banks must use the SBV’s daily rate as reference to list their daily ceiling and floor selling and buying rates). By the end of 2018, the SBV’s daily rate had increased by some 1.8 per cent over its January levels.

After keeping the daily reference exchange rate unchanged on the first day of 2019, the central bank raised the rate by VND3 to VND22,828 per dollar on Thursday.

With the current trading band of +/- 3 per cent, commercial banks are allowed to set their ceiling rate for the day at VND23,512 per dollar and their floor rate at VND22,144.

On Thursday, rates at commercial banks reversed the falling trend from last week.

Vietcombank increased both rates by VND5, listing the buying rate at VND23,160 per dollar and the selling rate at VND23,250.

The rates at BIDV went up by VND15 to VND23,165 for buying and VND23,255 for selling.

At Techcombank, the buying rate rose by VND25 to VND23,145 per dollar while the selling rate stayed level at VND23,245.

Vietcombank Securities Company (VCBS) said pressure on the dong may come from continued global monetary tightening and the unpredictable Chinese renminbi, but the foreign currency supply remains ample in the domestic market thanks to foreign-involved share sales and positive FDI disbursement. VCBS forecast the daily reference exchange rate of the dong against the dollar would weaken by no more than 3 per cent in 2019.

Experts said thanks to the country’s favourable macro-economic performance and the SBV’s flexible foreign exchange management, the dong was one of the steadiest currencies in Asia last year.

In 2018, the SBV’s USD/VND daily reference exchange rate rose by 1.87 per cent against the beginning of the year while the rate listed at commercial banks rose by 2.19 per cent.

CEO of HSBC Vietnam Pham Hong Hai told Nguoi lao dong (Labourers) newspaper that compared to the Vietnamese dong, currencies of many other Asian countries devaluated at a faster pace – 5-7 per cent on average. The Korean won lost 5.07 per cent, the Filipino peso depreciated 4.99 per cent, the Indian rupee devalued 9.58 per cent and the Chinese renminbi dropped 6.43 per cent. — VNS