Vietnam - Central Bank Sells USD150 Million to Stabilize Exchange Rate

by lexie Fri Sep 30, 2011 12:48 pm

September 30, 2011

Central Bank Sells USD150 Million to Stabilize Exchange Rate

The State Bank of Vietnam (SBV) sold out 150 million dollars (VND3,000 billion) last week to stabilize the USD/VND exchange rate.

The central bank, in a meeting with commercial banks on Sept. 7, said it would try to keep the exchange rate steady within 1% fluctuating band to the end of this year, and that it would interfere to ensure exchange rate stability if needed.

Earlier, the central bank also sold USD1.5 billion in three week from mid August to support the dong Reuters said.

However, according to VTV, the sale of 1.5 billion dollars was to increase the supply of foreign currency for gold importers during the gold frenzy in August.

The State Bank of Vietnam, on Sept 28, opened more gold quota in an effort to pull down local gold premium. Member of the National Advisory Council for Financial and Monetary Policies, Mr. Tran Hoang Ngan said that extended gold import will place more pressure on banks to raise the USD/VND exchange rate in the coming time.

As of 12:00PM (Sept. 29), USD was quoted in the free market at VND21,220 and VND21,270 for bid and ask, respectively. Agreed dollar price between banks and businesses at a large bank in Hanoi on Sept. 28 was up to VND21,000.

The central bank’s dollar selling also means a withdrawal of VND3 trillion from credit institutions.

http://www.vietfinancenews.com/2011/09/central-bank-sells-usd150-million-to.html#more