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SBV widens trading band of exchange rate to 3%
This new policy, which was set by Governor of State Bank of Vietnam (SBV) in Decision No.2635/QD-NHNN of November 6, 2008, allowed credit institutions to apply their daily trading band for the US$/VND exchange rate to +/- 3% against the inter-bank rate.
The decision comes into effect from today, November 7.
This is the fourth time this year that the State Bank has widened the daily trading band - which was +/-0.5 per cent at the start of January - to deal with complex fluctuations of both domestic and global foreign exchange markets. Prior to 2008, the central bank had only made very small alterations to the daily trading band a few times.
The new regulation will facilitate exchange rate more flexible and fairly reflect the foreign exchange supply and demand while ensure a sustainable development. Additionally, SBV forecasts that credit institutions might not use the whole range of the new trading band at the beginning.
SBV also committed to conduct the proper measures to ensure a rational exchange rate in compliance with the SBV policies.
SBV
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