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Central bank responds to easing forex market
The State Bank of Viet Nam (SBV) has again ceased selling US dollars to commercial banks as prices of the currency eased on the domestic market.
An official, who wished to remain anonymous, told Thoi bao Kinh te Sai Gon (Saigon Economic Times) that the SBV would only intervene in the market when exchange rates were in tense conditions.
Sacombank general director Phan Huy Khang said that exchange rates had stabilised and there were now no unusual fluctuations on the market.
The dollar/dong exchange rates fluctuated strongly during May and June after staying stable during the first four months of the year. The central bank stopped selling dollars for a month until July 12.
Exchange rates on the parallel market continuously saw sharp increases in July after the SBV raised the official exchange rate by 1 per cent, causing significant pressure on the foreign exchange market.
The price of the dollar at some moments amounted to VND22,000 on the free market, as a result of banks' dollar supplies depending completely on exporter sources - plus possible speculation factors.
Dollar prices have continuously declined for the last few days and on Tuesday hit VND21,090-21,246 at some commercial banks, including Vietcombank, Techcombank, Asia Commercial Bank, Eximbank and BIDV.
The exchange rates offered by commercial banks fell by roughly VND70 on Monday and Tuesday.
On the black market, dollar prices are ranging around VND21,410-21,430, the lowest levels recorded since the beginning of July.
The average exchange rate on the inter-bank market is now VND21,036 per dollar.
According to DongABank deputy general director Nguyen Thi Kim Xuyen, enterprises are now having modest demand for foreign currencies for goods imports, and this enable banks to lower exchange rates.
The SBV official said that exchange rates were expected to stay stable in the coming months as foreign currency supplies were likely to increase, with the nation's payment balance forecast to see a surplus of about US$5 billion this year.
People were also tending to sell foreign currencies to hold dong as the interest rate for dollar savings had fallen to 1.25 per cent per year, while interest rates for deposits in dong were hovering around 5-7 per cent per year.
Overseas remittance values were expected to total over $8 billion this year, equivalent to last year's figure.
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