Stabilising the value of Vietnamese currency, the Vietnamese dong (VND), is the most effective way to help businesses overcome difficulties and revive the economy in the context of the global crisis, said ,Chairman and Minister of the Government Office Vu Duc Dam.
Regarding the question on what the best investment channel would be best for 2012, the State Bank Governor Nguyen Van Binh affirmed that people should make deposits to banks in VND. The response indicates the priorities of the State Bank of Vietnam in changing its currency policies in 2012.
Vietnam has maintained exchange rates and foreign exchange market at stable levels despite facing many economic challenges in 2011.
The foreign currency exchange rate has kept steady and has not to exceed 1 percent from February 2011 to the year end. During the adjacent days of Lunar New Year holiday, the foreign currency market did not witness much change. Many commercial banks set the USD-VND exchange rate at around VND21,000, down VND106-116 , while the central bank also raised the US dollar buying price to VND20,850, up more than VND200 from previous days.
The negligible difference between the USD-VND exchange rate quoted at banks and on the free market is noteworthy as demand for US dollar always increased sharply on the Lunar New Year holiday.
Over the last year, with changes in monetary policy towards raising the value of Vietnamese currency, reality has proved that investing in VND is more profitable than investing in foreign currencies.
Many investors are turning to real estate and gold investments as foreign currency investing become less attractive. However, a difficult year in 2011 and gloomy outlook in 2012 for the real estate market along with tightening policies on the gold market’s management in the near future make both investment channels less advantageous than investing in VND.
All the above are positive good signs showing that VND will continue to maintain its advantages and further assert its position in 2012.
However, to achieve these goals, the central bank should follow the flexible exchange rate policy on the basis of foreign currency supply and demand in the market as well as the international balance of payments; at the same time it must maintain macroeconomic stability and ensure foreign currency supplies for importing necessary commodities.
The bank should further improve the legal framework related to foreign exchange control, encourage exports, reduce trade deficit, attract more foreign investments and overseas remittances, and increase the state’s foreign exchange reserves.
Enhancing inspections and supervisions over the monetary market and banking activities is also essential, as well as closely controlling the credit quality, and ensuring the health and safety of the monetary market.
Initially, the central bank should have timely and accurate assessments on the negative effects of bad debt treatments, consequences of the global crisis on foreign investment flows, and factors having strong impacts on stability of the exchange rate so that prompt and appropriate policies can be issued.
Nhan Dan
Vietnamese
