The Vietnamese central bank has intervened to prevent a strong valuation of the dong. Photo: Thanh Nien
The State Bank of Vietnam
(SBV), the country’s monetary regulator, has intervened to prevent the Vietnamese dong from strengthening too much against the U.S. dollar, in a bid to keep the forex market steady and support the export sector.
SBV’s Operations Center on January 9 raised the buying price of the greenback to 22,575 dong a USD, from 22,300 previously.
The move was made after the price of USD fell to around 22,560-22,570 dong/USD at banks, down 1% from the end of 2016. The greenback gained 1.2% in value against the Vietnamese currency last year.
After the central bank’s intervention, USD prices bounced back both on the interbank market and at banks.
This was the second time SBV made such an intervention in the past year to curb the appreciation of the U.S. dollar. The monetary regulator lastly prevented the USD/VND rate from falling below 22,300 in early February 2016.
The intervention is meant to give a hand to Vietnam’s export sector in the context of the strong devaluation of regional currencies recently. The country’s export turnover increased 8.6% year-on-year to $175.9 billion in 2016, missing the whole-year growth target of 10%.