Mr. Pham Thanh Ha, Director General of the Monetary Policy Department of the State Bank of Vietnam (SBV), has granted an interview to the correspondents about the SBV management of the forex market and the exchange rate developments in the recent days. Below is the full text of the interview.
Question (Q): Could you please make a general assessment of the exchange rate and the forex market in the first months of 2019?
Answer (A): After the SBV announced the spot selling exchange rate at VND 23,200 against the USD on January 2, 2019, the exchange rate in the market from the beginning of this year to April was relatively stable, the liquidity was good. This was resulted from the positive developments in the international market; the stable psychology in the domestic market and the abundant supply resources of foreign currencies. In that context, the SBV was able to purchase a large amount of foreign currencies to increase the state forex reserves, contributing to strengthening the national financial and monetary security and the capabilities of intervention in the forex market if necessary. From the end of April to present, the exchange rate has been on an upward trend; despite the anxious psychology in the market, the liquidity has been ensured and the legitimate demands for foreign currencies have been met promptly and fully.
Q: What are the reasons for the increase in the exchange rate over the recent time?
A: The exchange rate increased in the past days mainly due to the recent news on the US-China trade negotiations, which have raised some market concerns about the possibility of negative developments related to the international trade conflicts; at the same time, the CNY continued to depreciate in some days from the end of April until now. This has strongly influenced the psychology in the domestic forex market, thus putting pressure on the exchange rate. However, through the SBV's monitoring, the market liquidity still remains stable, the overall balance of foreign currency supply and demand was still relatively favorable.
Q: What are the SBV’s management orientations in the coming time?
A: The SBV will continue to closely monitor the international and domestic developments, manage the central rate in a flexible and proper manner, and conduct synchronously the measures and monetary instruments to stabilize the forex market. The SBV is ready to sell foreign currencies to intervene in the market if necessary, with the aim of stabilizing the forex market, helping to stablize the macro economy.
Q: Thank you!
Le hang