SBV has bought in 32 billion USD worth of hard currencies in the past more than two years. (Source: VNA)Hanoi (VNA) - The State Bank of Vietnam(SBV) has continuously bought in hard currencies in the past few months,raising the country’s foreign reserves to a record high of 63 billion USD.
Mai Tien Dung, Minister-Chairman of theGovernment Office, announced this at a recent press conference following amonthly Cabinet meeting.
SBV bought in 32 billion USD worth of hardcurrencies in the past more than two years, Dung said.
According to experts, SBV has also changedits way of purchasing foreign currency. Instead of using spot trade, thecentral bank has used futures contracts for the purchase of hard currenciessince February 7 this year.
Previously, the bank bought foreign currency inspot trade, with volumes reaching 1-3 billion USD per day, meaning that anequivalent volume of VND was pumped into the market in a short time.
But since February, the bank has launchedthree-month futures contracts to regulate the flow in a more flexible way. Some40 percent of the foreign reserves have been purchased through futurescontracts, helping to balance cash flows to moderate the pressures on interestrates, USD/VNĐ exchange rate and inflation.
Experts attributed the stability to reasons suchas SBV’s flexible central rate management mechanism, which ensured that thedomestic foreign exchange market was less affected by global factors.
In addition to this, the domestic supply-demandrelationship with the dollar was relatively stable thanks to foreign currencysupply from exports, foreign investment, official development assistance,tourism and remittances.
The rise in the country’s foreign reserves wasreported in the context of the foreign exchange rate in the domestic marketbeing relatively stable. According to the central bank, liquidity of thedomestic foreign exchange market was good and met the demands of localorganisations and individuals.-VNA
VNA
