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HANOI – Vietnam’s central bank is ready to immediately intervene in the foreign exchange market in case of adverse economic impacts from currency moves, its deputy governor said on Friday, noting it had already taken measures to reduce pressure on the currency.

The State Bank of Vietnam (SBV), the central bank, will be flexible in its handling of the exchange rate, deputy governor Dao Minh Tu told a media conference.

“We are ready to intervene if the exchange rate has a negative impact, even from today,” Tu said, adding the country had sufficient foreign exchange reserves.

The dong weakened past 25,000 per U.S. dollar earlier this month and is trading at record lows.

Tu said SBV has taken a number of steps to ease pressure on the exchange rate since the beginning of March, such as issuing Treasury bills to absorb dong from the market and selling the U.S. dollar to banks at a rate of 25,400 dong per dollar.

“Increasing imports demand is a good sign for the economy but puts pressure on the forex rates,” Dao Xuan Tuan, head of forex department said, adding a broadly stronger dollar was also responsible for the dong’s weakness.

Tu told reporters the dong had fallen by 4.9% against the U.S. dollar this year, and its movements were in line with other currencies in the region. He said that inflation remained under control.

Earlier this week the central bank said it would restart gold bar auctions as it looks to increase supply to the market.

Tu said details on the first auction would be sent to banks later on Friday and the sale would be held on Monday.

  • Published On Apr 19, 2024 at 02:20 PM IST

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