Governor of the State Bank of Vietnam, the country’s central bank, Nguyen Van Giau, told the government portal on Wednesday that the government has no plans to widen forex trading band.
“Currently, the SBV can ensure a balance between the supply and demand,” Governor Giau noted, denying rumors on lack or fever of the greenback on domestic market.
Nguyen Phuc Thanh, general director of Vietcombank, a key forex bank, also said Vietcombank can meet the local forex demand.
The US dollar was sold at VND17,680 and offered at VND17,730 on Wednesday’s afternoon, up VND80, or 0.5 per cent from Feb 23, meanwhile, VND/USD rate on inter-bank is stable at VND16,971/US$1, down VND1/US$1.
According to Reuters, Vietnam dong depreciated 8 per cent last year.
Earlier in January, Citigroup forecast that the dong will weaken to VND17,948 against US dollar by end-2009 due to drops in exports, tighter FDI and lower remittances while ANZ is more pessimistic that the dong will slide to as low as VND18,500 due to a drain in Vietnam’s forex reserves.
The Kim Eng Securities forecast that the dong will depreciate 14 per cent against US dollar in the next 12 months.
The Vietnamese prime minister recently assigned the SBV to work on plans to further widen the forex trading band to boost exports and curb trade gap.
Vietnam’s forex reserves were estimated at US$22 billion by end-November of 2008, equivalent to 12 weeks of imports, lower than 17 weeks of imports in 2007. (www.chinhphu.vn, HCMC Law)
Vietnamese
