Thao Nguyen
Bloomberg has recently quoted Prime Minister Nguyen Tan Dung as saying during his trip to the U.S. that the dong will be devalued by 2% against the greenback. However, Vu Duc Dam, minister and chairman of the Government Office, said that the exchange rate will remain stable until the end of this year.
However, the State will apply flexible exchange rate management policy in each period to avoid strong fluctuations. Otherwise, the economy will suffer many consequences with enterprises and people rushing to keep dollars. Exchange rate uncertainties will also cause challenges to enterprises in setting up business plans.
Overseas remittance, surplus of the balance of payments and high foreign reserves will help support the exchange rate in the final months of this year, the official said.
Pham Hong Hai, deputy general director of HSBC Vietnam Bank, said that dollar demand has yet to increase although it is the peak time for enterprises to boost imports. Meanwhile, local banks still have large foreign currency supplies while the demand for dollar loans from business is low now.
The reason is that the list of qualified dollar borrowers has been shortened while the unofficial foreign currency market has been narrowed down. These factors have supported the stability of the exchange rate, Hai said.
Besides, gold does not cause big impacts on the foreign currency market any more as gold demand of people has turned low. Meanwhile, the central bank is trying to secure gold supply for the market by organizing gold bar auctions.
“If the exchange rate rises by 2%, the level still goes in line with the commitment to keep exchange rate fluctuation at 2-3% made by the central bank’s governor early this year. In my opinion, with low dollar demand, the exchange rate will increase by around 1% in the fourth quarter,” Hai added.
The latest report of Standard Chartered Bank for the Southeast Asia has expressed optimism over the stable exchange rate in Vietnam since early this year. The exchange rate gap between the official and black market has been modest while U.S. dollar deposit rates at banks have been much lower than dong mobilization rates.
Meanwhile, the National Financial Supervisory Commission predicted that the foreign currency market and exchange rate will remain stable given supply-demand balance and rising foreign reserves.
HSBC Vietnam Bank in its October macroeconomic outlook report forecast the exchange rate at VND21,250 by the end of this year, or 1% increase compared to the current inter-bank rate.
Đăng ký: VietNam News
