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Exporters ease grip on dollars
Some export companies have begun to sell US dollars to commercial banks instead of holding on to them as before, a central bank official said.
Nguyen Quang Huy, the head of the State Bank of Viet Nam (SBV)’s Foreign Exchange Management Department, said exporters’ foreign currency deposits fell last week while their dong deposits rose sharply.
With the exchange rate stabilising and interest rates of above 9 per cent a year on dong deposits compared to 2.5-2.7 per cent on dollar deposits, clearly the former is more profitable.
Asked about a proposed measure to force exporters to sell all or some of their dollar holdings to banks, Huy said it was not necessary at this time.
Flexible exchange policy
SBV Governor Nguyen Van Giau said the central bank would retain a flexible foreign exchange policy and not devalue the dong.
"I affirm that Viet Nam does not intend to devalue the dong. The US dollar has depreciated against other currencies in the last two weeks, so there is no reason to devalue the local currency at this time when the nation’s macro economy remains stable and there is no shortage of dollars," he said.
The SBV would also keep the prime interest rate at 7 per cent, he said.
Asked about the recent hikes in deposit interest rates by many banks, Giau said it was normal since there was a huge demand for credit from businesses. Banks had to raise interest rates to meet this demand, he explained.
But most have only raised the rates on long-term deposits, with other rates remaining low, keeping average interest rates moderate.
According to the SBV, deposits and outstanding loans have risen by more than 10 per cent since the end of last year.
If the global and domestic economies perform well during the rest of the year, the credit growth target might be adjusted slightly higher than the initial target of 21-23 per cent, Giau said.
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