State Bank of Viet Nam (SBV) has continuously bought in hard currencies in the past few months, raising the country’s foreign reserves to a record high of US$63 billion.

Mai Tien Dung, Minister and Chairman of the Government Office, announced this at a recent press conference following a monthly Cabinet meeting.

SBV bought in $32 billion worth of hard currencies in the past more than two years, Dung said.

According to experts, SBV has also changed its way of purchasing foreign currency. Instead of using spot trade, the central bank has used futures contracts for the purchase of hard currencies since February 7 this year.

Previously, the bank bought foreign currency in spot trade, with volumes reaching $1-3 billion per day, meaning that an equivalent volume of Vietnamese dong was pumped into the market in a short time.

But since February, the bank has launched three-month futures contracts to regulate the flow in a more flexible way. Some 40 percent of the foreign reserves have been purchased through futures contracts, helping to balance cash flows to moderate the pressures on interest rates, USD/VND exchange rate and inflation.

Experts attributed the stability to reasons such as SBV’s flexible central rate management mechanism, which ensured that the domestic foreign exchange market was less affected by global factors.

In addition to this, the domestic supply-demand relationship with the dollar was relatively stable thanks to foreign currency supply from exports, foreign investment, official development assistance, tourism and remittances.

The rise in the country’s foreign reserves was reported in the context of the foreign exchange rate in the domestic market being relatively stable. According to the central bank, liquidity of the domestic foreign exchange market was good and met the demands of local organisations and individuals.

On Monday, SBV set the daily reference exchange rate at VND22,558 per US dollar, up VND6 from the last working day of last week.

With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VND23,251 per dollar and the floor rate is VND21,807.

Major commercial banks of Vietcombank, BIDV and Vietinbank on Monday listed the USD/VND exchange rate unchanged from last Friday, buying the greenback at VND22,735 and selling it at VND22,805. — VNS