The State Bank of Vietnam
(SBV), the country’s central bank, on July 7 resumed the purchase of hard currencies to thicken its foreign-exchange reserves, the Vietnam Economics Times cited sources from banks as saying, without specifying the quantity.
The move comes in the aftermath of the UK vote to leave the European Union and in the context of gold prices fluctuating strongly in Vietnam.
From the beginning of February this year, the banking regulator continuously bought in forex, with the amount reaching $8 billion as of the end of June.
The central bank, in turn, pumped cash in the dong into the banking system, helping increase liquidity.
To regulate the money market, the banking authority has been issuing large quantities of SBV bills to pull cash out of circulation. The amount of outstanding bills in the market increased to 21 trillion dong ($934 million) as of July 7.
Commercial banks have snapped up bills issued in the past three days with yields lowering, indicating that liquidity in the system is profuse, the newspaper added.
Vietnam’s foreign currency reserves have hit an all-time high of $38 billion, excluding gold holdings, SBV Governor Le Minh Hung told local press in mid-June.
Vietnam’s import value amounted to $73.09 billion in the year to June 15, slid 1.7% year-on-year, translating into $3.08 billion per week on average. This means that the country’s reserve fund can cover 12.33 weeks of import.