In the coming time, the central exchange rate may maintain and gradually decrease

At the Vietnam Economic Forum 2024 organized by Nguoi Lao Dong Newspaper on the morning of April 25, sharing information about the USD price on the “black market” market being higher than the price at banks, Deputy Governor Dao Minh Tu said. This is normal.

According to the Deputy Governor, because the free price of USD is higher, it is necessary to have the management of the State Bank with the desire to stabilize the exchange rate market, not because the exchange rate at banks is higher than outside.

In current conditions, the foreign currency balance in the market is more severe than in the past because the exchange rate is rising and foreign currency sources are stressed, combined with psychological factors, so the black market price of USD is increasing.

“It is true that the recent exchange rate has fluctuated, but in the coming time, if the bank exchange rate, especially the central exchange rate, can be maintained and gradually decrease, the USD exchange rate in the market will also decrease. is the normal state of the economy,” the Deputy Governor affirmed.

As we reported previously, the free USD price (black market) has continuously recorded strong fluctuations recently.

At the peak of the April 22 session, the USD price on the free market increased sharply to around 25,780-25,800 VND on the buying side, while the selling price was about 25,870-25,900 VND. Compared to the USD price at the bank, the free USD price is about 400 VND higher.

Along with the cooling of the exchange rate on the official market, the USD price on the free market is now less “hot” than a few days ago. Many foreign currency collection points on the unofficial market have reduced the USD exchange rate by about 150-200 VND in the past two days. Currently the buying price is about 25,600 VND and the selling price is about 25,700 VND.

Sharing at the Vietnam Economic Forum 2024, Standing Deputy Governor of the State Bank Dao Minh Tu said that exchange rates are a big problem of the economy, if not managed effectively, it will affect inflation. broadcast. Therefore, the State Bank also raised the issue of exchange rate management and administration in the coming time.

“We stabilize the exchange rate, not fix it, ensuring the foreign currency status is zero, not negative,” the SBV leader emphasized.

According to Mr. Tu, the State Bank has had solutions to achieve the above goal such as regulating the amount of money in circulation to harmonize, operating reasonable interest rates to harmonize with exchange rates and calculating a reasonable level to achieve both. 2 goals.

State Bank leaders said that they regulate the central exchange rate to prevent speculation and hoarding of foreign currencies. The State Bank has promoted tools to maximize benefits for businesses and the final measure is administrative in nature, when forced to sell foreign currency. Although this is just the first step in being ready to sell foreign currency.

“We hope that businesses and the economy should not expect, hold, or invest foreign currency to create pressure on the foreign currency balance for the economy, so that businesses and commercial banks can implement it together.” fulfills the goal of supporting the economy,” Mr. Tu said.

Assessing exchange rate developments, the Deputy Governor said that recently there have been fluctuations and VND has also accepted to lose value compared to the beginning of the year. In 2023, VND will depreciate about 2.6%, but compared to surrounding countries, maintaining this level will be a very difficult effort.

According to Mr. Tu, at the Press Conference in early 2024, the State Bank had information that if necessary to stabilize the exchange rate, it would use foreign exchange reserve funds to intervene. To date, the central exchange rate has decreased to 4.8% compared to 2023. However, this depreciation is still positive compared to many markets such as Taiwan (China) 5.96%; Thailand, Japan, Korea, and Switzerland all depreciated much more…

“Due to the openness of the economy, managing the exchange rate at this time is very important. The State Bank will manage the exchange rate appropriately,” the Deputy Governor said.

Mr. Tu said that the State Bank expects the FED to lower interest rates but so far there is no policy information. USD appreciation is at its highest level ever. Reduced investment demand and protectionist policies of major countries. World consumer demand also decreased, affecting the exports of Vietnamese enterprises; Transportation logistics pushes product prices high; raw materials and goods of affected countries; Fear of tension and conflict in the Middle East caused gold prices to skyrocket. Never before has the world gold price exceeded 2,400 USD/ounce… which has impacted the exchange rate and directly impacted Vietnam’s import and export businesses.

In addition, the rapid decrease in VND interest rates causes an imbalance between VND and USD interest rates, also pushing up the exchange rate. Import and export are relatively vibrant, so the source of foreign currency for imports also consumes a large amount of foreign currency.