Vietnam Has Strong Dollar Reserves to Support Dong

Banks in Vietnam has strong reserves of foreign currencies to support the economy and stabilize the forex market, central bank officials said on March 25.

 

Central bank Governor Nguyen Van Giau told the Banking Times newspaper that the State Bank of Vietnam has forex reserves of more than US$20 billion, and commercial banks are keeping more than US$10 billion for enterprises.

 

This is the first time Giau revealed the amount of dollar deposits from the enterprises.

 

Meanwhile, Director Nguyen Ngoc Bao of the central bank’s department of monetary policy said that “the people are holding dollar funds of US$9 billion”, the newspaper said.

 

Analysts said the central bank officials are telling the figures just because they are under pressure to confirm that Vietnam is capable of protecting the value of the dong, following a central bank decision to widen the daily trading band for USD/VND to 5 per cent from previous 3 per cent on Tuesday.

 

Many foreign analysts have so far forecast that the dong would be devaluated to as much as VND18,500 later this year, from VND16,978 today.

 

According to the government’s statistical figures released today, the dong has fallen an average 9.53 per cent against the U.S dollar in the first quarter this year, and falling 11.16 per cent from March 2008. (Banking Times)