The exchange rate between Vietnamese Dong (VND) and US Dollar (USD) continued to increase last week. In order to ensure balance and harmony of supply and demand, the State Bank has used measures to regulate and coordinate the central exchange rate appropriately.

According to Deputy Governor of the State Bank, Dao Minh Tu: The State Bank is ready to intervene if the exchange rate continues to be with adverse developments, including interventions.

During the weekend trading session of April 19, the State Bank announced the central exchange rate between VND and USD at VND 24,260, an increase of VND 164 compared to the beginning of the week. This is the highest price of the central exchange rate ever. With the +/-5% margin being applied, the ceiling exchange rate applied by banks is VND 25,473/USD and the floor exchange rate is VND 23,047/USD.

According to experts, there are many reasons pushing up the USD; The main reason is that the USD-Index has increased again after falling to a low level since the end of 2023.

At the recent press conference on providing information on banking performance in the first quarter of 2024 of the State Bank, Deputy Governor of the State Bank Dao Minh Tu said that the exchange rate increase to date compared to the beginning of the year is 4. 9%, is also a concern.

The State Bank has always followed closely and also used tools and measures; including the management of the central exchange rate to coordinate the appropriate increase and decrease to ensure balance and harmony of supply and demand.

According to Deputy Governor Dao Minh Tuy, the exchange rate increase is due to the expectation that the Fed will soon lower interest rates in 2024 but has not yet been able to do so; US inflation remains high, employment figures are positive, and the market continues to adjust. Many forecasts say that the Fed will loosen monetary policy in the first 3 months of the year, but on the contrary, so far we have not seen anything.

“Vietnam has a very flexible view on managing exchange rates. Although we continue to stabilize the exchange rate for the economy, it is not fixed, on the contrary, it fluctuates to suit the situation and avoid strong impacts from the world. We are also ready to intervene if the exchange rate continues to have adverse impacts, including intervention from today”, said the Deputy Governor.

The representative of the State Bank said that this is a strong measure of the State Bank to ensure relief from market psychology, ensure market supply, smooth foreign currency supply, and fully ensure the economy's legal foreign currency needs.

Regarding monetary policy management, the State Bank will continue to closely monitor market developments and economic situations at home and abroad to flexibly and synchronously manage monetary policy tools and solutions to control inflation, contributing to stabilizing the macroeconomy, stabilizing the money and foreign exchange markets. In particular, continue to manage exchange rates flexibly to stabilize the foreign exchange market, contributing to macroeconomic stability.

Kylie Nguyen