State Bank adjusts USD/VND exchange rate band to 5%

October 17, 2022 | 15:18

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The State Bank of Vietnam (SBV) has decided to widen the USD/VND spot exchange rate band from +/-3% to +/-5%, effective from October 17.

Hanoi – The State Bank of Vietnam (SBV) has decided to widen the trade band of USD/VND spot exchange rate from +/-3% to +/-5%, effective from October 17.

State Bank adjusts USD/VND exchange rate band to 5%

Illustrative photo (Source: VNA)

According to the SBV, between the beginning of 2022 and now, the US Federal Reserve (Fed) and many major central banks have tightened monetary policy, and raised interest rates.

Meanwhile, the Russia-Ukraine conflict has disrupted the global supply chain, pushed up gasoline and commodity prices, causing great fluctuations in the international and domestic markets.

In response, the State Bank has proactively and flexibly implemented tools, solutions and interventions to maintain stable and smooth operation of the currency and foreign exchange markets.

The bank said after the latest trading band adjustment, it will continue to closely monitor market developments, coordinate monetary policy tools, and stay ready to sell foreign currencies to stabilise the market when necessary.

Inflation risks pose questions for exchange rate policy

In response to the recent Fed’s interest rate hike, the State Bank of Vietnam is predicted to tighten its monetary policy in an attempt to curb inflation, with a focus on controlling the exchange rate.

Reference exchange rate down 18 VND

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 23,263 VND/USD on September 9, down 18 VND from the previous day.

Exporters seeking to retain competitive edge

Adverse fluctuations in the exchange rate and high USD interest rates could be detrimental to Vietnam’s exports next year, urging businesses to proactively respond to exchange rate issues in addition to the State Bank of Vietnam’s intervention.

By VNA

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