State Bank sends new signal to stabilize exchange rate

The foreign exchange market has shown new signs. The State Bank has taken another indirect action to confirm its stabilization policy.

After a significant increase in the first two days of this week, since yesterday afternoon, the USD price listed by commercial banks has leveled off; the selling price is from 21,360 - 21,380 VND.

However, by 9am this morning (June 25), the USD selling price at some commercial banks had a noticeable movement. For example, at the Vietnam Export Import Bank (Eximbank), there were two consecutive decreases, from 21,380 VND to 21,360 VND.

After adjusting the average interbank exchange rate, the State Bank continued to reveal the use of another tool - measure for the goal - commitment to keep the USD/VND exchange rate stable. Illustrative photo

It could be a coincidence or it could be an initial reaction from market members when the State Bank officially sends out a new signal.

Specifically, after nearly a week since the adjustment of the average interbank exchange rate by 1% (June 19), the State Bank of Vietnam Exchange has returned to listing transaction prices instead of the "temporary out of the loop" status. The listed price of this hub is very noteworthy.

Applicable for today, the State Bank of Vietnam kept the USD buying price unchanged at 21,100 VND, but applied the selling price at 21,400 VND. The official market has an important reference.

Over the past year, since the adjustment on June 28, 2013, the State Bank has continuously maintained the selling price at the ceiling of the average interbank exchange rate. This means that in order for this agency to support foreign currency sources, market members must accept the highest price.

But in the new signal mentioned above, the State Bank applied the USD selling price quite deep below the current ceiling, 21,400 VND compared to 21,458 VND. Playing the role of the last buyer and seller in the market to intervene and regulate supply and demand, proactively posting the selling price deep below the above ceiling shows that the operator is willing to create supply at a more comfortable price than the previous most expensive price mechanism.

On the other hand, the selling price that the State Bank of Vietnam has just listed can also be considered a "soft stop" (because it can be flexibly adjusted over trading days), with an orientation towards the possibility of short-term exchange rate fluctuations.

During the fluctuations of the USD/VND exchange rate from early May 2014 until now, updated information shows that the State Bank has not directly sold to intervene. However, with the above event, the operator has signaled readiness for this possibility if the market needs it, or if supply and demand show signs of imbalance. The foreign exchange reserve resource of more than 35 billion USD is a support.

Thus, after adjusting the average interbank exchange rate, restructuring and continuing to handle the problem of excess VND capital in the system..., the State Bank continues to reveal the use of another tool - measure for the goal - commitment to keep the USD/VND exchange rate stable from now until the end of the year.

According to VnEconomy