Exchange rate remains stable

Deputy Governor Dao Minh Tu affirmed that the exchange rate is still guaranteed to maintain stability and still ensure an open foreign exchange market, ensuring general foreign exchange balances.

Deputy Governor of the State Bank Dao Minh Tu (Photo: Nhat Bac)

Speaking at the regular Government press conference on the afternoon of April 3, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu said that the issue of exchange rates is extremely hot and there has been an increase in prices recently. "This is one of the issues that the SBV believes is worth paying attention to and being managed in a centralized manner," said Mr. Tu.

Analyzing the reasons for the recent increase in exchange rates, the Deputy Governor said that the US Federal Reserve (FED) has not yet given a specific time to loosen monetary policy or lower interest rates, causing the value of the USD to increase very high in recent days. The increase in the value of the USD will affect the depreciation of other countries in the world and in the region, thus affecting the Vietnamese Dong in the exchange rate relationship with the USD.

Second, Vietnam's policy of lowering interest rates can be said to be very strong in recent times. Therefore, it has created and is creating a difference in interest rates between the Vietnamese Dong and the USD in the interbank market, continuing to maintain a negative level, meaning that the Vietnamese interest rate is lower than the USD interest rate in the interbank market. "That is also one of the pressures that makes the USD heat up," said Mr. Tu.

Third, according to Mr. Tu, in the first 3 months of the year, there was also a positive signal that imports were relatively positive, so the demand for foreign currency for imports was also higher than in the previous period. In addition, there are also a number of other policies that can impact the exchange rate policy.

However, Deputy Governor Dao Minh Tu affirmed that the exchange rate still ensures stability and ensures an open foreign exchange market, ensures general foreign exchange balances as well as meets the legitimate foreign exchange needs of businesses and import-export needs.

According to the leader of the State Bank, it can be said that the depreciation rate of the Vietnamese Dong compared to the USD compared to other countries is still low.

In 2023, the exchange rate will depreciate by about 2.9%, but up to now, we are calculating that on the interbank market, the exchange rate between the Vietnamese Dong and the USD has also increased by about 2.6%. But compared to other major countries, such as the Chinese Yuan, which has also depreciated by about 1.4% against the USD; the Thai Baht by about 5.93%; the Korean Won by about 3.88%; the Japanese Yen has also depreciated by 7.52%...

"It can be seen that big countries and big economies are also affected by the USD exchange rate due to the US USD policy," said Mr. Tu.

Affirming that exchange rate is one of the factors related to and plays a very important role in macroeconomic management, the Deputy Governor said that exchange rate not only affects the value of money and people's purchasing power, but also greatly affects policies, especially macroeconomic stability as well as inflation control, market psychology, and investor confidence.

“The State Bank of Vietnam always considers exchange rate management as one of the most important and focused tasks. In the coming time, we will continue to operate according to a very flexible mechanism, ensuring that our operations can make the exchange rate fluctuate in accordance with the general trend and also ensure the set goal of stability, ensuring harmony between the foreign currency status always maintaining a positive state as well as ensuring foreign currency balance for the legitimate needs of the economy,” the Deputy Governor affirmed.

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