Central bank keeps exchange rate in check as currency market heats up

The inter-bank rate hit a record high of more than VND25,000 a US dollar on April 2, while the rate in the black market rose to VND25,500 a US dollar.

The exchange rate management still ensures stability and foreign currency balance, meeting legal foreign currency demand for import and export activities, as well as the general needs of the economy, said Dao Minh Tu, deputy governor of the central bank, at a press briefing on April 3.

The depreciation rate of VND against USD remains low compared to other countries, he added.

According to the bank official, the green banknote of the US has gained its value in recent times, prompting other currencies worldwide, including VND, to go down.

In addition, Vietnam has subsequently lowered interest rates, creating inadequacies between the interest rate difference in the interbank market.

This even put more pressure on the exchange rate to go up in the market, said Tu.

He affirmed that exchange rate management is a very important macroeconomic management as it greatly affects Vietnam’s economic and inflation control policy, as well as market psychology and investor confidence.

In the coming time, he said the State Bank will continue to flexibly manage the exchange rate to ensure that the rate can go up and down in accordance with market trend.

The ultimate goal is to maintain a positive foreign currency status and foreign currency balance for the legitimate needs of the economy, stressed the bank official.