25.6 C
Ho Chi Minh City
Tuesday, June 25, 2024

What happens next?

By Trieu Minh

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With the current foreign exchange reserves able to sustain around three months of imports, selling foreign currency to stabilize the foreign exchange market is absolutely not a long-term solution. Psychological therapy? On April 21, the buying price of the U.S. dollar on the informal market rose by a sharp VND160 to an all-time high of VND25,680 to the dollar. Meanwhile, the greenback’s selling price also increased by VND90 to VND25,760, also a new record. Compared to early this year, the U.S. dollar on the informal market has appreciated by 3.9% on the buying side and 4% on the selling side. On the formal market, the spot rates quoted by banks have even increased more strongly, at 4.5% against the beginning of the year. In response to the rising pressure, the State Bank of Vietnam (SBV) intervened in the market on April 19 by reopening the foreign exchange selling channel. Specifically, the SBV will sell foreign currency immediately to credit institutions with short dollar positions and those with a need to purchase foreign currency from the SBV. However, the selling price set by the SBV at the same time was VND25,450 per U.S. dollar, much higher than the buying price that […]
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