Prices of the U.S. dollar quoted by Vietnamese banks have declined in comparison with the dong, the local currency, over the past three days, as market sentiment has stabilized after State Bank of Vietnam (SBV), the country’s central bank, launched a more market-based exchange rate on January 4.
Vietcombank on Wednesday afternoon listed the greenback at 22,385 dong a USD for bid and 22,455 dong for ask, down 10 dong from in the morning of the same day and 35 dong from Tuesday morning.
Prices of the U.S. dollar declined between 20 and 35 dong from Tuesday morning at other banks, data compiled by BizLIVE showed.
The selling price of the greenback had dropped 110 dong on Tuesday morning from the highest level of 22,540 a USD record last week, according to the online Vietnam Economic Times (VnEconomy).
The reference interbank USD/VND rate set by the SBV strengthened to 21,909 on Wednesday after three days of weakening.
Local media cited banks as saying that an abundant supply of the greenback in Vietnam has been attributed to the weakening of the currency against the dong.
The supply comes from foreign direct and indirect investment, local businesses, inbound remittances as well as mergers and acquisitions deals while the demand side has undergone little change, the Saigon Times newspaper reported, citing bankers. The USD/VND rate is forecast to move in a range of 22,400-22,500 next week.
Andy Ho, managing director and chief investment officer at VinaCapital Group. (Photo: Internet)
Andy Ho, chief investment officer at VinaCapital Group, the largest fund manager in the country, told BizLIVE that the SBV’s new forex rate management mechanism would not lead to strong fluctuations in Vietnam’s capital market or hurt foreign capital inflows.
Experienced foreign stocks investors could adjust their portfolios in anticipation of movements of the SBV-set forex rate, he added.
Mr. Andy Ho reckoned that the continued foreign sales in the Vietnamese stock market recently was normal as they reshuffled their portfolios to fit in macro factors such as the strengthening of the U.S. dollar, the Fed’s interest rate hikes and fluctuations of the Chinese yuan.