Vietnam to speed up foreign currency selling
The State Bank of Vietnam is set to increase the frequency of currency selling amid rising U.S. interest rates, which have strengthened the greenback.
With a foreign exchange reserve of over $100 billion, the central bank will continue to sell its foreign currency to stabilize the market, Pham Chi Quang, deputy head of the bank’s currency policy department, said Monday.
“The State Bank of Vietnam will increase its sale of foreign currency to increase market supply.”
The central bank’s decision came after the U.S. Federal Reserve on May 16 increased its interest rate by 0.75 percentage point, the biggest increase in 28 years and the third time this year.
The increases boosted the U.S. Dollar Index, which measures the value of the greenback against a basket of foreign currencies, by 10 percent compared to the start of the year.
But Quang said the Vietnamese dong had only weakened against the U.S. dollar by around 2 percent so far this year, which shows the dong is stable.
Demand for foreign currency is met on time, especially for businesses who need to import essential items amid rising energy and commodity prices, he added.
The State Bank will continue to manage the currency exchange rate with flexibility to absorb external shocks, help stabilize the macro economy and control inflation.