SBV Deputy Governor Dao Minh Tu speaks at the press conference on October 1. (Photo: VNA)Hanoi (VNS/VNA) - TheState Bank of Vietnam (SBV)'s exchange rate management policy has beenappropriate and effective, creating benefits for the economy and confidence forthe market.
Speakingat a press conference held in Hanoi on October 1 to review the performance ofthe banking industry in the third quarter of 2019, SBV Deputy Governor DaoMinh Tu said the assessment was made by members of the National MonetaryPolicies Council in its recent meeting.
Whilecountries worldwide devalued or appreciated their currencies sharply, the SBVhad kept the local currency relatively stable, with the management policy basedon the overall balance of the economy such as import and export, public debt,balance of payments and current accounts, Tu said.
Reportsfrom the SBV showed currently, the foreign exchange rate in the domestic marketis relatively stable, increasing and decreasing slightly in comparison with thelarge fluctuations of currencies around the world.
Specifically,on the first two days of this week, the USD Index on the international marketincreased continuously to reach a two-year record high of 99.2 points. However,in the domestic market, the exchange rate at commercial banks only increasedand decreased slightly.
Accordingto the nine-month economic report by the General Statistics Office, despite bigeconomic changes in many countries, including the US Federal Reserve (Fed)’sdecision to cut interest rates by 0.25 percentage points in mid-September, theUSD/VND exchange rate did not fluctuate significantly thanks to the SBV’sflexible exchange rate management policy. Specifically, the dollar depreciatedslightly by just 0.11 percent against the previous month, 0.49 percent againstDecember 2018 and 0.39 percent against the same period in 2018.
As aresult, the domestic market liquidity has been ensured while foreign currencytransactions have been conducted promptly and smoothly. It has also helped thecentral bank net buy dollars to build up the nation’s foreign reserves.
Accordingto Tu, many people think that the VND needs to be devalued to supportexports as they are slowing. However, Tu said, the slowdown is seen with allcountries and it isn’t feasible to use exchange rates as a tool to promoteexports as import volume – mainly materials and equipment to produce goods forexport – is also very large.
In thefuture, Tu said the SBV would conduct open market operations and regulate thecredit institution's liquidity at a reasonable level to stabilise the monetarymarket.
It wouldalso combine other monetary policy instruments and take flexible marketinterventions to stabilise the foreign exchange market, which would contributeto stabilising the macro-economy and supporting reasonable economic growth andbuild up the nation’s foreign reserves when there are favourable conditions, Tusaid./.
VNA
