State Bank sells foreign exchange intervention term, USD price cools down

Today (August 25), the central exchange rate announced by the State Bank of Vietnam (SBV) was 25,291 25,298 VND/USD, down 7 VND compared to the closing session last weekend. Previously, the central USD exchange rate had increased sharply by 49 VND last week and set a record of 25,298 VND/USD.

With a margin of 5%, the current USD exchange rate range that commercial banks are allowed to trade is between 24,026 - 26,556 VND/USD.

The USD price cooled down as the State Bank began selling foreign currency forwards with a term of 180 days, with a selling price of VND26,550/USD from today.

State Bank sells foreign currency futures, USD price cools down.

However, the transaction is only performed for credit institutions with negative foreign currency status. The maximum amount of foreign currency sold for each bank in each transaction is to bring the bank's foreign currency status to balance. For forward transactions of 100 million USD or more, credit institutions are allowed to cancel up to three times. If the forward transaction is less than 100 million USD, banks are allowed to cancel up to two times.

The time to apply the method of selling foreign currency for a period of 2 days is August 25 and 26. This information has caused the USD price in the market to calm down. The USD price of commercial banks is currently 70 VND lower than the selling price of the operator.

Accordingly, Vietcombank listed the USD exchange rate at 26,090 - 26,480 VND/USD, down 40 VND in both directions compared to the end of last week. Compared to the peak set on August 21, the USD selling price at this bank has decreased by 56 VND.

At BIDV , the buying price of USD has decreased sharply by 100 VND, while the selling price has decreased by 82 VND compared to the end of last week, listed at 26,120 - 26,480 VND/USD. VietinBank's performance is quite different with the buying price increasing sharply by 53 VND, while the selling price has decreased by 27 VND per USD, listed at 26,123 - 26,483 VND/USD...

Other major banks such as Techcombank,ACB , MB, Eximbank, Sacombank also simultaneously reduced the USD selling price to below 26,500 VND/USD.

The State Bank's move was made in the context of the domestic exchange rate continuously climbing with an increase of approximately 4% since the beginning of the year, despite the weakening of the USD in the international market with the DXY index decreasing by 10.5% since the beginning of the year.

The exchange rate tension comes from causes such as: increased pressure on foreign currency demand to pay government debt, reduced trade surplus and increased speculative psychology...

According to analysts, the State Bank's provision of foreign currency forward contracts (with cancellation) aims to set a hard threshold for the interbank exchange rate around VND26,550, while eliminating market expectations that the State Bank will continue to loosen the exchange rate ceiling.

With the above intervention, along with expectations that the Fed will reduce interest rates and remittances and FDI disbursement will accelerate at the end of the year, it is expected that the exchange rate will "calm down" again.

Ngoc Vy

Source: https://vtcnews.vn/ngan-hang-nha-nuoc-ban-can-thiep-ngoai-te-ky-han-gia-usd-ha-nhiet-ar961742.html