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State bank able to prevent exchange rate changing a lot
A State Bank of Vietnam (SBV) official has said the SBV is capable of intervening in the foreign exchange market to prevent a big change in the US dollar-Vietnam dong exchange rate.
SBV Foreign Exchange Management Department Director Nguyen Quang Huy made the statement on May 27, when the dong lost value against the greenback, with one US dollar converted to 17,500 VND.
According to Huy, the dong’s sharp depreciation on the free market will affect businesses and the public and will partly disrupt the attraction of capital in local and foreign currencies.
He said the US dollar’s appreciation was due to a demand for the currency among a group of the public that have listened to newly-released information on inflation and are involved in speculation.
He added, however, that the gap between the demand for and supply of the greenback is not too large and is completely under the State’s control.
Inflation remained high in the first five months of this year and the Government has requested increasing exports and reducing unnecessary imports, Huy said.
The SBV’s regulation of the exchange rate will focus on maintaining its stability, with the fluctuation being at 2 percent as instructed by the Prime Minister.
The SBV will continue directly intervening in the foreign exchange market to ensure sufficient supply of this foreign currency for the economy and not to let the situation affect credit organisations and businesses, he said.
VNA
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