The State Bank of Vietnam has just issued a notice on adjusting the USD/VND spot exchange rate band from ±3% to ±5%.

Accordingly, in order to proactively adapt to unpredictable developments in the international market and follow the direction of tightening monetary policy and raising interest rates of the US Federal Reserve (Fed) and central banks around the world, on October 17, 2022, the State Bank of Vietnam issued Decision No. 1747/QD-NHNN stipulating the spot exchange rate between Vietnam Dong and foreign currencies of authorized credit institutions.

Specifically, the spot exchange rate between Vietnam Dong and US Dollar (USD) was adjusted from ±3% to ±5%. The SBV will continue to closely monitor market developments, coordinate monetary policy tools, and be ready to sell foreign currencies to stabilize the market.

From the beginning of 2022 until now, the Fed and many major central banks have stepped up the roadmap to tighten monetary policy, rapidly increase policy interest rates, in addition, the Russia-Ukraine conflict has disrupted the global supply chain, petrol and commodity prices increased, inflation in many economies has been out of control, etc. causing great fluctuations in the international and domestic markets.

Facing the situation, the State Bank of Vietnam has actively and flexibly applied synchronously tools, solutions and interventions to maintain stable and smooth operation of the currency and foreign exchange markets, thereby contributing to macroeconomic stability, controlling inflation, and supporting the implementation of the objectives set out in the socio-economic recovery and development program under Resolution 43 of the National Assembly and Resolution 11 of the Government.

The central exchange rate today (October 17) was announced by the State Bank at VND 23,586/USD, a sharp increase of VND 45 compared to the listed level at the end of last week. With the applicable margin of 5%, currently, the USD exchange rate allowed by commercial banks for transactions is from VND 22,406 to 24,765/USD.

Kylie Nguyen