VND/US$ rate will hold stable: SBV (19/05)
06/08/2010 - 161 Lượt xem
Though the VND/US$ exchange rate has returned to its normal track after several days of fluctuation, leaving the public worried that the local currency will lose further ground. A VND20,000/US$1 level has been forecast by analysts, although Mr Thuy said that such a rate is highly unlikely.
How could you comment about the forex market in the last few days?
The ‘dollar fever’ in the last few days should be seen purely as a psychological impact of public fears driving dollar purchases for fear that it may skyrocket. Meanwhile speculators were trying to force the exchange rate as high as it would go to ensure they make maximum profit. It is unusual to see the dollar price go up so dramatically in Vietnam, while it is devaluing against other hard currencies in the international market.
Now 1 Euro is traded for US$1.3, while it was converted at $1.12 at the end of 2005. A weaker dollar has been anticipated by international analysts, as the US Federal Reserves intends to cap the key US$ interest rate, while the Bank of Japan (BOJ) and European central banks are planning to raise the yen and euro interest rates.
In the domestic market, although the dollar continued increasing in value compared to the local currency, the increased level is quite modest, at 1-2% per annum. I think a VND devaluation rate of 1-2% will be maintained over the next few years.
The greenback price once reached VND17,000/US$1 in the black market. Why didn’t the central bank take urgent measures to cap the market?
Why should the central bank have to intervene in the market? I know the SBV was thought to be late in making an intervention, but I think the central bank should intervene only when price fluctuations can cause macro economic imbalance.
SBV, as the monetary policy regulator, found it unreasonable to intervene in the forex market. All that has happened recently should be seen as nothing more than a temporary fluctuation caused by market psychology. Of course, for hasty investors, those who tried to buy dollars at any cost, they will incur losses.
If a commercial bank is facing bankruptcy as its depositors make massive withdrawals, then the SVB would intervene immediately. However, the central bank will take no action if the VND/US$ exchange rate or gold price increases, even over a long period.
Although the VND/US$ exchange rate has returned to normal, many people are still withdrawing money from banks, or buying more dollars for savings. What is your comment on this?
Every citizen has his own way of behaviour, and the Government should not interfere the citizens’ business.
Source: Tien phong
