According to the assessment of the State Bank of Vietnam (SBV), the upward trend of the exchange rate in those days was normal movement and in accordance with the upward trend of the central rate as recently announced by the SBV.
In the first ten months of 2016, the exchange rate and money market were basically stable and the issue of the hoarding of foreign currencies had reduced sharply as compared to previously, thanks to new methods of managing the exchange rate in a flexible manner, as well as favorable developments in foreign currency supply and demand. The SBV purchased a large amount of foreign currencies to raise the State's international reserves. Over recent days the exchange rate was on an upward trend (by the afternoon of November 17, the exchange rate in the inter-bank market was at VND/USD 22,450 which was lower by VND 50 than the exchange rate at the end of 2015).
According to the assessment of the State Bank of Vietnam (SBV), the upward trend of the exchange rate in those days was normal movement and in accordance with the upward trend of the central rate as recently announced by the SBV. The money market has not recorded any hikes in foreign currency demand, liquidity was in good condition, and the legitimate foreign currency demands of institutions and individuals were met fully and promptly.
Up to the end of 2016, the favorable factors in foreign currency supply and demand have been as follows: foreign currency supply will be supported by a number of resources such as foreign direct investment, capital inflow from mergers and acquisitions, remittances at the end of year, and etc. There has not been any pressure on increasing foreign currency demand due to the fact that the SBV continues to control credit at a reasonable level; a part of foreign currency demand from customers will be met through the banking sector's foreign currency resources when the SBV has extended the duration of foreign currency loans provided to resident borrowers until the end of 2017; the flexible management of exchange rates has decreased the hoarding of foreign currencies; the issuance of Circular No. 15/2015/TT-NHNN (October, 2015) has restricted institutions and individuals to making foreign exchange spot transactions before the due date of overseas payment.
The SBV will continue to closely monitor macro-economic and monetary developments in the domestic and international markets, in order to conduct appropriate measures and manage tools for achieving the set objectives of monetary policy and contribute to stabilizing the macro–balances of the economy.
Translated by Le Hang