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State Bank of Vietnam decreases dollar buying rate

State Bank of Vietnam decreases dollar buying rate

HANOI: The State Bank of Việt Nam (SBV) decreased the buying rate of the US dollar (USD) on Tuesday. This marked a significant difference in this year’s exchange rate, as compared to the previous years. According to the rate listing of SBV’s Transaction Centre, the buying rate for the USD on October 10 was VNĐ22,720 per $1, down VNĐ5 against the rate at the end of June 2017. The selling price was VNĐ23,121 per $1, VNĐ20 lower than the ceiling price. It is the first time the monetary policy regulator decided to reduce the buying price of the USD, since Việt Nam applied the central rate regime in 2016. Prior to this adjustment, SBV had raised the purchasing price of the USD three times since the beginning of this year, in January, April and June. By increasing the buying price, the regulator purchased foreign currency to raise its foreign exchange reserves to a record $42 billion.

The decrease of VNĐ5 in the USD buying rate is not big. However, this decline created a different signal in the market in the last months of 2017, as compared to the usual tendency of tension many years ago. With this, 2017 is expected to be a stable year for the USD/VNĐ exchange rate, creating conditions for enterprises to boost production and to reduce risks from exchange rate fluctuations. In addition, the VNĐ20 lower selling price against the ceiling price of the USD also sends a message that the SBV is willing to offer a lower price than the ceiling price to stabilise the market, if necessary.