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SBV raises greenback buying price
Hong Phuc
Thursday,  Apr 13, 2017,21:29 (GMT+7)

SBV raises greenback buying price

Hong Phuc

A bank teller checks U.S. dollar banknotes. The central bank has just raised the greenback buying price by VND100 to VND22,675 to the dollar - PHOTO: THANH HOA

HCMC - The State Bank of Vietnam (SBV) on Tuesday increased the price of U.S. dollars bought from credit institutions by VND100 to VND22,675.

At the same time, the greenback selling price was lifted to the prescribed ceiling, VND50 lower than the level that was maintained a long time ago. The central bank set the selling price at VND22,941 to the dollar.

This hike of the U.S. dollar buying and selling prices took place after the old levels had been kept unchanged since January 9.

Banks consider this as a manifestation of the SBV’s optimism on the upcoming evolution of the monetary market as well as the economy. However, there are also concerns since optimism may not bring about as positive results as expected.

“This sharp increase in the buying price of the foreign currency signals the foreign currency inflow will be relatively abundant in the near future and the purchase price hike will help actively absorb more capital. However, the spending on the U.S. dollar must be accompanied by the launch of a corresponding amount of the dong into the market, thus the supply of the dong will go up, meaning inflation will be more difficult to control,” said a currency trading specialist.

The central rate was VND22,321 to the dollar on April 12, unchanged from the day before, but picking up VND5 from the first day of the week. The ceiling and floor prices were VND21,652 and VND22,991 respectively.

After the spike of the dollar buying and selling prices was announced this Tuesday, the interbank foreign exchange market underwent more complex developments than other days.

The exchange rate was quoted at VND22,660 per dollar early this Tuesday, before it quickly fell to the resistance level of VND22,650 as a number of banks felt the pressure to sell off and cut losses to keep their foreign exchange status intact.

However, in the middle of the trading day, information about the central bank’s raising the buying price of the dollar came out, quickly pushing up the exchange rate to the balance at VND22,669/VND22,671 (buying/selling).

The rate closed at VND22,670, up VND8 from the preceding day. The free market rate dropped by VND20 for buying and VND25 for selling, traded at around VND22,680 and VND22,695 respectively.

In the dong market, loan interest rates continued to rise marginally by 0.02-0.06 percentage point for all terms. In particular, the rate stood at 4.92% per annum for overnight term, 5% for one week, 5.02% for two weeks and 5.04% for one month.

Similarly, the average interbank rate for the dollar rose slightly, standing at 1.24% a year for overnight term, 1.4% for one week, 1.5% for two weeks and 1.67% for one month.

Government bond yields on the secondary market inched up for the maturity of seven years or below and remained unchanged from the previous week for the 15-year term.

For open market operations this Tuesday, credit institutions won a bid of nearly VND10.33 trillion, with a one-week term and an interest rate of 5% per annum, taking the net volume injected via OMO to some VND31.33 trillion.

In the international market, the greenback continued to fall sharply with political turmoil.

North Korea warns of a nuclear strike if there is any sign of U.S. aggression. Meanwhile, President Trump tweeted Pyongyang is “looking for trouble” and that the states will “solve the problem” with or without China. This development caused the greenback to depreciate against other currencies and assets.

The world gold price surged to US$1,274.06 an ounce (up 1.58% from last weekend). Meanwhile, the domestic gold price went up to VND36.62 million per tael for buying and VND36.82 million for selling, some VND1.7 million higher than the word level. A tael equals to 1.2 troy ounces.

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