The State Bank of Vietnam on October 26 raised the interbank exchange rate by VND20 to VND20,768 per dollar, its highest level this year.
It was the 12th increase since October 5. The interbank dollar exchange rate has advanced VND140 per dollar, or 0.68 per cent, over the past two months since the central bank committed to keeping fluctuation under 1 per cent until the end of this year. Therefore, to meet its pledge, the dollar exchange rate will be allowed to surge 0.32 per cent or by VND66.
At commercial banks, dollar exchange rates on October 26 listed higher than VND20,970, up VND21 over the previous day. Vietcombank and Vietinbank quoted the greenback at VND20,971/20,976 while Eximbank and ACB figures were VND20,953/20,963.
Experts said that the foreign exchange market will likely experience tension at the end of the year when demand for US dollars increased due to rising imports and repayment of foreign currency loans.
However, vice chairman of the National Financial Supervisory Commission, Le Xuan Nghia told Tuoi Tre (Youth) newspaper that the Government will indeed be able to keep rate fluctuation under 1 per cent.
Nghia explained that balance of payments is expected to see a surplus of $4-$5 billion this year, the first since 2007. The country's foreign exchange reserves are also estimated to be equal to 7.5 weeks of import cover compared to 3.5 weeks earlier this year, higher than that expected by the National Financial Supervisory Commission.
He said that capital accounts currently enjoy a surplus of around $9 billion, alongside positive remittance.
While the government fights inflation, it cannot let the exchange rate rise as sharply as during previous years, he noted.
Nghia explained that one of the factors which have pressurised exchange rates during recent days include foreign currency deposits being $7 billion lower than the amounts loaned out as of the end of September.
Local corporate borrowers are trying to buy dollars to repay their foreign currency loans while the central bank is willing to sell dollars to meet high demand, he said, adding that the bank will use the balance of payments surplus to stabilise the forex market.