April 25, 2017 06:00

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Deputy Governor of the State Bank: the exchange rate could be reverse in near future

20:38 | 26/11/2016

VCN – Before the significant increasing of the exchange rate between USD and VND in 2 weeks, leaders of the Vietnam State Bank have indicated that the main reason for this is the psychological factor.

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Deputy Governor of the State Bank of Viet Nam - Nguyễn Thị Hồng.

According to Mrs. Nguyen Thi Hong, Deputy Governor of the Central bank, the movement of the exchange rate between VND and USD is a strong shift in the domestic market recently. It is understandable.

"In early 2016, the State bank changed to the new operation mode for exchange rate that is more flexible. It allowed the exchange rate to fluctuate every day in line with the movement of the domestic and international market. “As we see, in the world, the dollar and other currencies also have large fluctuations ", the Deputy Governor explained.

Despite the fluctuations of the market, the representatives of the State Bank said that basically the supply and demand of foreign currency has no unexpected factors, good liquidity, the legitimate needs for foreign currency of organizations and individuals are responded promptly and fully by the credit agency.

Talking about the foreign currency market in the near future, according to Mrs. Nguyen Thi Hong, increase of the exchange rate rapidly in a short time is mainly due to psychological factors and it could be reversed in the near future.

Furthermore, according to the State bank, from now until the end of the year, the supply sources of foreign currency continue to be supported by revenues from exports, remittances at the end of the year, the disbursement of direct investment inflows, indirect investment, etc. Meanwhile, the demand for foreign exchange doesn’t have great pressure, especially the need to buy foreign currency before maturity is not high, usually when the exchange rate increases.

Besides that, the State bank has allowed the credit agency to continue with foreign currency credit in accordance with Circular No. 24/2015/TT-NHN stipulated about foreign currency credit of credit agency and branches of foreign banks for customers who are residents by the end of 2017. It contributes to reduce the demand for purchasing foreign currency for overseas payment and continues to support the domestic market.

From the above situation, the State Bank said that they will monitor closely the movement of the macroeconomic, monetary and international situations in order to actively implement the appropriate measures and instruments for operation, and to stabilize the market.

"The central bank is willing to sell foreign currency to intervene in the market", Deputy Governor, Mrs. Nguyen Thi Hong asserted.

By Hương Dịu/Thanh Thuy