The State Bank of Vietnam (SBV)’s Operations Centre has decided to adjust the reference exchange rate of the VND against the USD for the first time since February 2018.

 

The centre has raised its buying rate of the USD against the VND for commercial banks by 500 VND to 23,200 VND per dollar starting on January 2. The SBV uses the rate as a reference to buy US dollars from commercial banks. It kept the selling rate unchanged at 23,463 VND per dollar.

 

This was the first adjustment since February 8, 2018, when the centre lowered its buying rate by 10 VND to 22,700 VND 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 percent 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 3 VND to 22,828 VND per dollar on January 3.

 

With the current trading band of /- 3 percent, commercial banks are allowed to set their ceiling rate for the day at 23,512 VND per dollar and their floor rate at 22,144 VND.

 

On January 3, rates at commercial banks reversed the falling trend from last week.

Vietcombank increased both rates by 5 VND, listing the buying rate at 23,160 VND per dollar and the selling rate at 23,250 VND.

 

The rates at BIDV went up by 15 VND to 23,165 VND for buying and 23,255 VND for selling.

 

At Techcombank, the buying rate rose by 25 VND to 23,145 VND per dollar while the selling rate stayed level at 23,245 VND.

 

Vietcombank Securities Company (VCBS) said pressure on the VND 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 VND against the USD would weaken by no more than 3 percent in 2019.

 

Experts said thanks to the country’s favourable macro-economic performance and the SBV’s flexible foreign exchange management, the VND 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 percent against the beginning of the year while the rate listed at commercial banks rose by 2.19 percent.

  

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