Exchange rate policy: A guessing gameBy Hai Ly Vietnam is not spared from the impact of the international financial developments. The U.S. dollar rate on the interbank market does not have any sign of decline - PHOTO: THANH HOA The State Bank of Vietnam has enough resources to stabilize the foreign exchange market, which is under the pressure of change due to several factors. However, it’s not easy to guess the concrete steps it will take. The price for U.S. dollar transfers quoted by commercial banks early last week made a big jump, soaring by more than VND100 to VND23,110 per dollar. Compared with prices on the free market, this price is just lower than the dollar selling price by merely VND30 per dollar but higher than the buying price on the unofficial market. However, the gap between the buying and selling prices of banks is as much as VND70, much bigger than the small gap of VND10-30 during previous exchange rate fluctuations. According to several … [Read more...] about Exchange rate policy: A guessing game
Real effective exchange rate
Exchange rate policy hits farm exports
Exchange rate policy hits farm exports Truc Diem A salesgirl shows coffee beans at an exhibition in this file photo. The weakening of many currencies against the U.S. dollar has cut into the competitiveness of Vietnam’s farm exports - PHOTO: TL HANOI – The weakening of many currencies against the U.S. dollar has cut into the competitiveness of Vietnam’s farm exports, heard a workshop in Hanoi last week. Nguyen Trung Kien from the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) said that in 2014-2015, Brazil’s real, Colombia’s peso, India’s rupee, Indonesia’s rupiah, Malaysia’s ringgit and Thailand’s baht fell by 42%, 37%, 5%, 13%, 19% and 5% against the greenback respectively. But the Vietnamese dong currency dropped by a slight 3% versus the dollar, Kien told the workshop on prospects of the agricultural industry held by the institute. In addition to the countries whose farm produce … [Read more...] about Exchange rate policy hits farm exports
HSBC: OMO rate to drop to 4.5%
HSBC: OMO rate to drop to 4.5% Dinh Duy By Dinh Duy - The Saigon Times Daily HCMC – HSBC Bank said there is room for another 50 basis points cut of the open market operations (OMO) rate to send it down to 4.5% as the real interest rate is at a record high at the moment. Inflation is muted at 0.9% year-on-year in March even after the Government raised the average electricity tariffs by 7.5%. Even as price pressures are expected to pick up gradually in the second half this year, HSBC expected the consumer price index (CPI) to be well within the central bank’s target of less than 5%. The OMO rate is currently 5% and there is scope for the central bank to lower rates marginally to support growth, the bank said. In a macro economic report released on April 2, HSBC said the central bank is mindful of economic developments. The country is export dependent with shipments making up as much as 81% of gross domestic product (GDP) in 2014. Tourism is important as well. The … [Read more...] about HSBC: OMO rate to drop to 4.5%
Dollar rates to remain stable until year-end
HA NOI — The US dollar-Vietnamese dong exchange rate is expected to hold steady to the end of this year, but ANZ and Standard Chartered banks anticipates a dong devaluation early next year. According to ANZ's report released on Wednesday, Government efforts to stabilise the foreign exchange market and restore confidence in the dong were having a positive effect. The dong onshore trading rate has stabilised in the VND20,550-VND20,650 per US dollar range in recent months. In the offshore Non Deliverable Forward (NDF) market, the dong's implied 12-month discount has narrowed by 2.2 percentage points from its post-devaluation peak in February. The dong's one-month NDF discount has also stabilised around 1 per cent. "The State Bank of Viet Nam (SBV)'s more aggressive stance on inflation and changes in its FX policy are behind the recent stabilisation," ANZ's report said. However, both ANZ and Standard Chartered Bank assumed that depreciation pressure would resume next year due to … [Read more...] about Dollar rates to remain stable until year-end
Divisions lower hopes of G20 breakthrough
The world's leading nations were divided on February 18 over plans to reduce global economic imbalances, with China determined to head off international criticism over its huge foreign exchange reserves. France had hoped to strike a deal at the weekend on economic indicators that would be used to monitor imbalances, including current account balances, real exchange rates and foreign exchange reserves. In an urgent appeal for agreement, Nicolas Sarkozy, French president, asked G20 finance ministers and central bank governors to look beyond a "mechanistic approach". "We will not succeed in everything. But the worst-case scenario would be to refuse to address the real subject, the international monetary order ... I hope your discussions will not get bogged down in interminable debate on these indicators." China, however, signalled its opposition to the monitoring plan. "We think it is not appropriate to use real effective exchange rates and reserves," said Xie Xuren, Chinese … [Read more...] about Divisions lower hopes of G20 breakthrough