Dong falls to new low against greenback

The State Bank of Vietnam (SBV) Tuesday raised its USD/VND reference exchange rate to VND23,165, an increase of VND340 since the beginning of this year.

However, exchange rates at local banks have remained stable in recent days in contrast to fluctuations of the past as the reference rate rose. Vietnam targets keeping the dong depreciation within 2-3 percent a year.

Vietcombank sold the dollar for VND23,270 and bought it for VND23,120 Tuesday, unchanged from Monday. Since the beginning of this year, its exchange rate has increased by only VND15.

Eximbank’s rates were VND23,250 for selling and VND23,140 for buying, while that of Sacombank were VND23,261 for selling and VND23,101 for buying.

Experts said the central bank’s move aimed to facilitate buying more dollars to increase foreign exchange reserves.

Bao Viet Securities said in a recent note that the pressure on dong depreciation can be reduced this year because of an increase in foreign exchange reserves.

Vietnam’s foreign exchange reserves have reached the record $71 billion, according to the SBV. 

BIDV could sell a 15 percent stake to South Korean KEB Hana Bank, while Vietcombank could sell a 6.5 percent stake and Military Bank could sell a 7.5 percent stake to other foreign investors, the brokerage house said, adding that the total value of these deals could reach $2 billion.

RongViet Securities, meanwhile, said that exchange rate risks remain as the yuan has fallen to CNY7 per USD. However, it also added that the central bank still has enough room to control the dong-dollar exchange rate till the end of the year.