Inter-bank Rate Breaks Through VND16,000

For the first time ever, the official dollar-dong exchange rate has broken through the VND16,000 barrier and reached VND16,002 on the inter-bank foreign currency market, the State Bank of Viet Nam (SBV) announced yesterday.

For the first time ever, the official dollar-dong exchange rate breaks through the VND16,000 barrier on the inter-bank foreign currency market

“It is completely normal!” exclaimed Truong Van Phuoc, director of the SBV’s Foreign Exchange Management Department, to a reporter from Sai Gon Giai Phong newspaper.
 
Of course, the rate at commercial banks and on the black market passed VND16,000 four months ago, but this is a first for the official rate from the central bank.
 
The new rate of VND16,002 is 0.82% above the SBV’s rate at the start of 2006. Unless something odd happens, the dong will have been weakened by 1% against the dollar from January to December this year.
 
Mr. Phuoc describes Viet Nam’s current exchange rate mechanism as “floating in the government’s regulation and management.”
 
The SBV says the market has no shortage of foreign currencies and that its foreign reserves are at their highest level in two years.
 
The SBV’s Monetary Policy Department has said that Viet Nam’s economy has a record foreign currency surplus of around US$2.2 billion, or three times higher than last year.
 
Obviously the fact that the official rate has finally exceeded VND16,000 should have little impact on the exchange rates at commercial banks and the free market.
 
Yesterday the dollar was trading at VND16,042 at one commercial bank, while the black market rate in Ha Noi was VND16,070 in the morning and 16,060 in the afternoon, basically the same as where it’s been for the past month.

Source: SGGP – Translated by Yen Chuong

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