Forex trading band widened to 3%, dong fall expected GDP target lowered amid economic slowdown concerns By Thuy Trieu - The Saigon Times Daily HCMC - The central bank decided on Thursday to widen the trading band between Vietnam dong and the U.S. dollar from 2% to 3% on either side of the official rate, a move which is expected to allow the local current to fall against the greenback to support export. The decision comes into force Friday, just two days after the central bank announced interest rate changes to enable firms, especially exporters, to gain easy access to bank loans which had become too expensive due to the earlier monetary tightening aimed at curbing inflation. Domestic exporters are feeling the impact of the global economic slowdown. The widening of the forex trading band will pave the way for the dong to fall, thus supporting growth in the export sector and the economy as a whole. In a statement posted on its website, the central bank said that the forex trading band … [Read more...] about Forex trading band widened to 3%, dong fall expected
Vietnam forex trading
Forex trading band widened to 5% By Thuy Trieu - The Saigon Times Daily HCMC - The State Bank of Vietnam on Monday decided to widen the forex trading band between Vietnam dong and the U.S. dollar from the current 3% to 5% effective today, a move expected to allow for Vietnam dong to further depreciate against the greenback. The central bank in a statement released on its website explains that Vietnam has obtained positive economic indicators in the first quarter this year such as a low rate of consumer price index (CPI) and a substantial trade surplus, and the widening of the forex trading band will strengthen the flexibility of the economy. Besides widening the forex rate band, the central bank said that it would strictly punish all institutions trying to sell the U.S. at prices higher than permitted under any forms. Under current regulations, banks cannot sell the U.S. dollar at a price lower or higher than the inter-bank rate given everyday by the central bank plus the trading … [Read more...] about Forex trading band widened to 5%
Banks back wider forex trading band By Thuy Trieu and Hong Van - The Saigon Times Daily HCMC - Most commercial banks on Tuesday showed support for the central bank's widening of the forex trading band from 3% to 5% as the new band will give bigger room for banks to maneuver. Earlier, due to the surging demand, banks resorted to various ways to sell dollars to enterprises at prices higher than their official quotations, which violated the current regulations. "Now, banks and exporters can trade dollars at higher prices officially," Sy said. Dinh The Hien, a financial expert and a member of the consulting board for the Vietnam Export Import Commercial Bank, said the U.S. dollar demand now relied much on the movements of global markets. "Therefore, if the trading band is not big enough, banks will find it hard to flexibly change their forex rate," he said, adding he supported the latest central bank move. By early on Tuesday, banks quoted the selling price of the dollar at … [Read more...] about Banks back wider forex trading band
Black market forex trade silenced over fear of central bank penalties By Thuong Trieu - The Saigon Times Daily HCMC – The central bank’s strong-worded warnings to foreign currency trading outside banks have sent ripples through the black market, as most private forex counters in Hanoi and then HCMC have refrained from money dealings these days. Money changers in Hanoi City succumbed to the warnings first, as most dealers refused trading on Monday, while the phenomenon spread to HCMC a day later. Those in need of U.S. dollars now find it difficult to buy the greenback on the “black market”, which somewhat lends support to the local currency. Some exchange counters at An Dong and Ben Thanh markets in HCMC that do not have forex exchange licenses still maintain operations but also have become so cautious, dealing in small volumes. Nguyen Minh Anh, the owner of an exchange counter on Le Thanh Ton Street near Ben Thanh Market, said since last weekend when news … [Read more...] about Black market forex trade silenced over fear of central bank penalties
VietNamNet Bridge - Economists have repeatedly urged the State Bank of Vietnam (SBV) to devalue the dong in response to the Chinese yuan devaluation. SBV, in its latest move, shows signs that it will continue stabilizing the dong. “Vietnam needs to devalue the dong promptly, with reference to the Chinese yuan depreciation. For example, if China devalues the yuan by 5 percent, Vietnam needs to devalue the dong by more than 5 percent, possibly 6-7 percent,” said Nguyen Duc Thanh, director of VEPR on Bizlive. According to Thanh, China is the last large economy to devalue its currency. Prior to that, Japan, the EU, Russia and Australia all either had devalued their currencies, or accepted the currencies’ depreciation. This has made the dong, which is closely pegged to the dollar, become stronger against than other currencies. China once followed a policy on stabilizing its currency. However, it has decided to devalue the yuan as well. Regarding the time … [Read more...] about SBV widens forex trading band. What’s next?