Vietnam’s currency stable despite global uncertainties

Despite uncertainties in the global financial market, Vietnam’s currency and foreign exchange markets have remained stable, local media reported on Monday.

The Vietnamese dong is one of the most stable currencies in Asia, local newspaper Vietnam News reported, citing the Singapore-based United Overseas Bank (UOB).

Despite major changes in the Fed’s interest rate hike expectations and fears of a global recession, the Vietnamese dong traded in a narrow range of 0.8 percent, at around 23,600 Vietnamese dong per U.S. dollar, according to the bank’s report.

When the State Bank of Vietnam (SBV) balances efforts to promote economic growth and ensure price stability, it is likely that the SBV will favor a more loose policy in the coming period, it said.

According to Vo Tri Thanh, a member of the National Monetary and Financial Policy Advisory Council, besides inflation being under control, foreign currency liquidity has improved remarkably thanks to the relatively positive supply of foreign currency from disbursed foreign direct investment, the recovery of the tourism sector post-pandemic, and rising trade surplus, which has helped the exchange rate to be stable under global uncertainty.

Besides, foreign currency inflows from capital sales and disbursement of foreign currency loans have been quite positive, he said.

Forecasting exchange rate movements, UOB’s analysts said the Vietnamese dong will likely remain stable though the SBV cut policy interest rates twice thanks to the recovery of exports and industrial production in the coming months, and falling inflation.

Forecast results in April of the Vietnam Interbank Market Research Association also showed the spot rate of U.S. dollars/Vietnamese dong in the interbank market will be stable at around 23,476 Vietnamese dong per U. S. dollar, against 23,592 Vietnamese dong in March. ■

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