Customers during foreign exchange transaction at the HDBank’s head office in HCM City (Source: VNA)Hanoi (VNA) - Commercial banksare optimistic about the foreign exchange market in 2018, noting that themarket would be stable with the Vietnamese dong devaluing slightly by some0.5-1 percentage points to 22,710 VND to 22,950 VND.
According to the Bank for Investment andDevelopment of Vietnam’s capital and monetary researching division, thecountry’s overall balance of payment can maintain a healthy surplus of some 8billion-10 billion USD this year, which is important for the stability of theforeign exchange market.
The good balance of payment is thanks to atrade surplus forecast for this year, while the remittance inflow would inch upby 5 percent to 10.5 billion USD.
Besides, foreign direct and indirectinvestment capital inflows are also anticipated to maintain their high growth,owing to the improvement in the business environment of the country, the divisionsaid, forecasting that the disbursement of the capital source could reach 21-23billion USD this year.
However, the division also forecast thatthe liquidity of the US dollar in the inter-bank market in 2018 will not be asabundant as last year, causing the interest rate for one-week loans in themarket to rise by some 0.5-0.6 percentage points, against the end of 2017, to2-2.1 percent.
According to the division, there will besome factors that will put pressure on the rate in the inter-bank market thisyear.
Firstly, the gap between lending andcapital mobilisation of the greenback will continuously be maintained thisyear, as lending in the dollars is forecast to continuously rise by 8 percentto 10 percent, given the stable exchange rate and the central bank’s continuousforeign currency lending policy, while the dollar capital mobilisation isestimated to rise by only 3 percent to 5 percent, in the wake of the centralbank’s zero percent dollar deposit interest rate policy.
Secondly, the interest rate on the dollarin the global market is expected to increase by 0.6-0.7 percentage points peryear in 2018, as the US Federal Reserve (Fed) is expected to make another ratehike this year if its economy continues on an upward trend.
A leader of a commercial bank, who declinedto be named, admitted that it was necessary to be cautious with dollarliquidity, as lending in the currency was rising significantly, while theincreasing rate of capital mobilisation was much lower.
The division also reported that theinterest rate on dollar loans in the inter-bank market by the end of last yearrose some 0.4 percent to 0.5 percent per year, against the end of 2016.
Besides this, the Libor interest rate inthe international market last year also rose some 0.6 percent to 0.7 percentyearly for one-week to three-week loans after the Fed increased the rate thricefrom 0.5-0.75 percent to 1.25-1.5 percent per year.
The State Bank of Vietnam has so far alsorequired credit institutions and foreign bank branches to strictly controltheir loans in dollars, in a move to balance lending and mobilisation. - VNA
VNA
