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Banking & Finance

SBV unexpectedly increases exchange rate

Released at: 08:52, 08/01/2015

SBV unexpectedly increases exchange rate

Changes took effect yesterday.

by Nguyen Hung

Late on the afternoon of January 6 the State Bank of Vietnam (SBV) announced exchange rate increases of 1 per cent, to take effect on January 7.

The new average interbank exchange rate between VND/USD to apply from January 7 is set at 1 per cent, increasing the rate from VND21,246 to VND 21,458 against the greenback, with an exchange rate margin of +/- 1 per cent, a ceiling rate of VND21,673, and a floor rate of VND21,243.

The margin rate adjustment is therefore equal to that in 2014 as a whole, and the margin adjustable rate is 2 per cent for all of 2015.

The exchange rate adjustment is to implement Resolution No.01/NQ-CP dated January 3 2015, under which the SBV is responsible for monetary policy initiatives and flexibility, in close coordination with fiscal policy, to actively control the inflation target, ensure macroeconomic stability, and promote economic growth consistent with macroeconomic developments, inflation, and the currency market.

Despite international financial market fluctuations, in 2014 exchange rates and foreign currency market movements were stable, at an average rate of 1 per cent. After more than six months maintaining the interbank exchange rate at a stable VND21,246, this SBV adjustment aims to actively manage the market, adapt to changes in the domestic and international financial market, and stabilize the monetary market.

The SBV said it will ensure the synchronous operation of all measures and policy instruments to stabilize the exchange rate and foreign currency market.

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