Vietnam’s foreign currency reserves have swelled to $40 billion currently thanks to a combination of macroeconomic policies, the Saigon Times newspaper cited a central bank official as saying.
The country’s balance of payments started to post a hefty surplus in 2012 and this trend continued into 2015, which has enabled the State Bank of Vietnam (SBV) to buy in large quantities of forex. “Vietnam’s forex reserves reached a record high of over $35 billion in 2015,” said the official.
“If gold, forex of the State Treasury and credit institutions deposited at the SBV are taken into account, the volume of forex reserves have amounted to around $40 billion presently,” he added.
This is a remarkable improvement since the country’s reserve fund dwindled to $9 billion in 2010 due to large trade deficits and undermined confidence in the Vietnamese dong.
The forex reserves totaled $35 billion in April 2014 and touched $37 billion in July 2015, SBV Governor Nguyen Van Binh said in different occasions.
The forex reserves now can cover 12 weeks of imports, Bao Viet Securities Co. (BVSC) quoted State Securities Commission Chairman Vu Bang at saying at a seminar in Ho Chi Minh City earlier this month.
Vietnam’s $865-million trade surplus in the first two months of this year helped strengthen the forex supply and dampen USD hoarding and speculation, according to BVSC.
The Vietnamese banking regulator bought in $2.6 billion in forex from early February to the end of the first fortnight of March, and the amount could reach $3 billion a week later, according to the Vietnam Economic Times.
Former SBV Governor Cao Sy Kiem attributed the rise in the forex reserves to the country’s macroeconomic stability and SBV’s success in taming the forex market, lifting the confidence in the dong and reducing the dollarization in the economy.