Vietnam central bank asked to facilitate funds for fuel imports

By Reuters   October 19, 2022 | 08:07 pm PT
Vietnam central bank asked to facilitate funds for fuel imports
A Vietnamese flag flies atop the State Bank building, near the Vietcombank and Bank for Investment and Development of Vietnam buildings, in central Hanoi, Vietnam November 23, 2017. Photo by Reuters/Kham
Vietnam's government has asked its central bank to help local fuel traders have better access to foreign currencies to pay for fuel imports, the Ministry of Industry and Trade said late on Wednesday.

The ministry, in a document sent to the State Bank of Vietnam, said the move would help fuel trading firms "quickly make their purchases of fuel products for the domestic market," it said in a statement.

The statement came days after several filling stations in southern Vietnam closed or limited their sales, citing financial difficulties, according to state media.

The Southeast Asian country has this year faced a steep rise in imported fuel prices and a strengthening of the U.S. dollar, making fuel imports even more expensive.

Vietnam's refined fuel imports in the first nine months of this year rose 22.7% from a year earlier to 6.52 million tonnes, but the import value rose 131% to $6.8 billion, according to government customs data.

So far this year, the dong has fallen by more than 7% against the dollar.

The central bank on Monday widened its exchange rate trading band to 5.0% from 3.0% in a move to allow the dong to further weaken.

Vietnam's foreign reserves had risen steadily over the past decade, reaching $100 billion by the end of last year. The central bank, however, has recently been forced to sell its greenback to the market to support the local currency. Market analysts estimate it has this year sold around $20 billion.

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