In response to the fall of domestic currencies, central banks in the region have two options. They can either sell foreign currency to intervene or raise interest rates. The State Bank of Vietnam (SBV) is flexibly using both. Focusing on exchange rate As of May 27, 2024, the central exchange rate between the Vietnam dong and the U.S. dollar had increased by VND22 against late April. Given that the dong fell by a total of VND243 against the dollar in April, the depreciation of the local currency slowed in May. The dollar price at Vietcombank, the country’s leading foreign trade bank, increased by VND638 in April for both buying and selling, but since early May, it has risen by a mere VND163 for buying and VND23 for selling compared to the previous month. On the informal market, the dollar has advanced by VND65 for buying and stayed almost unchanged for selling since early May, compared to a respective increase of VND275 and VND300 in April. The SBV effort to increase dollar supply to regulate the foreign exchange market is seen as a key factor for stabilizing the exchange rate over the past month. Some sources said that from April 22 […]
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