Central bank doubles band due to external factors.
On the morning of August 12 the State Bank of Vietnam (SBV) announced that, under Decision No. 1595/QD-NHNN dated August 11, the exchange rate band will increase from +/- 1 per cent to +/-2 per cent, effective August 12.
The average interbank VND/USD exchange rate is VND21,673, with a ceiling rate of VND21,106, and a floor rate of VND21,240.
In the first half of this year the SBV adjusted the average interbank exchange rate twice, from VND21,246 to VND21,458 on January 7 and to VND21,673 on May 7.
The decision originates from unpredictable factors in the global economic situation, such as falling oil prices and expectations that the US Federal Reserve will adjust exchange rates due to the Greek crisis. The most influential factor, however, was the Chinese Renminbi being devaluated 1.9 per cent on August 11. Given the huge trade turnover between Vietnam and China, the SBV said, the devaluation will have a negative impact on Vietnam’s economy.