Exchange rate in Vietnam increases, State Bank sells foreign currency to intervene

On December 5, speaking to the press on the sidelines of an event taking place in Ho Chi Minh City, Mr. Pham Chi Quang, Director of the Monetary Policy Department, State Bank, said that from the beginning of 2025, the foreign exchange market and the USD/VND exchange rate will mainly be affected by complex and unpredictable developments in the international market.

Specifically, the unpredictable monetary policy path of the US Federal Reserve (FED), US trade and tariff policies and fluctuations of the international USD. In some periods, the balance of domestic foreign currency supply and demand is under temporary pressure from short-term factors.

In that context, the State Bank has managed the exchange rate flexibly, in accordance with market conditions, contributing to absorbing external shocks. At the same time, it has coordinated monetary policy tools such as interest rates, VND liquidity and foreign currency intervention to stabilize the foreign exchange market and exchange rates, thereby contributing to stabilizing the macro economy and controlling inflation.

- Ảnh 1. — The exchange rate in Vietnam has increased about 3.5% compared to the end of last year.

"Currently, the above factors have shown signs of stabilizing, while Vietnam's trade activities and foreign balances continue to remain positive. In the coming time, the State Bank is ready to intervene in foreign currency when necessary to ensure the smooth operation of the foreign exchange market, contributing to stabilizing the macro economy and controlling inflation," said Mr. Quang.

In fact, the liquidity of VND in the interbank market has recently been difficult, although the State Bank has continued to support the liquidity of the credit institution system through open market operations, thereby putting pressure on the exchange rate. Currently, the lending interest rate in the open market (OMO) has increased from 4% to 4.5%. The interbank interest rate remains at around 7%.

Mr. Pham Chi Quang affirmed that the State Bank has different monetary regulation channels and flexibly uses the above tools in each period to suit market developments and monetary policy goals.

Typically, recently, when some credit institutions increased their demand for VND liquidity at the end of the year, the State Bank implemented foreign currency swap transactions with credit institutions to stabilize the currency market.

"The State Bank will continue to closely monitor developments and proactively regulate appropriately with tools and solutions at the right time and in the right doses, both supporting exchange rate stability and macroeconomic stability," Mr. Quang affirmed.

On December 5, the central exchange rate was listed by the State Bank at 25,151 VND/USD, slightly down compared to yesterday.

The USD price at commercial banks is traded around 26,168 VND/USD for buying and 26,408 VND/USD for selling, down slightly compared to the previous day. The USD/VND exchange rate has stagnated in recent days but has still increased significantly since the beginning of the year, an increase of about 3.5%.