State Bank rejects dong devaluation

SBV’s Deputy Governor Le Minh Hung: SBV will maintain exchange rate

The Deputy Governor of SBV, Le Minh Hung, made this statement in response to a rumour that the bank was preparing to increase the exchange rate in the near future.

“Foreign currency reserves are currently at record high, and the SBV is capable of meeting the market demand, so it would not be necessary to make an adjustment to the exchange rate at this time,” Hung affirmed.

He added that foreign currency supply within the banking system is quite superfluous. Last year the SBV increased its reserves of USD to 15 billion and continued this buying trend, increasing by USD5 billion since the beginning of the year. This has brought up the national foreign currency reserves to the record high.

The phenomenon of people rushing to buy USD, which drove up the exchange rate on the unofficial market, was a result of a rumour that the SBV would adjust exchange rates, he said.

"This rumour was groundless, and initiated by speculators who wanted to artificially push up the exchange rate in the short-term for their own profit, at the risk of others. The SBV is currently cooperating with other relevant authorities to find the best solution to dispel such rumours.

Increased supervision will be applied to better deal with the unofficial currency trade,” he noted.

He advised caution for those who hear groundless information, and added that it is better to retain VND instead of trading in USD.

The SBV has requested commercial banks to increase USD sales to meet market demand. Banks have been asked to not buy USD, excepting cases of real payment needs.

Previously, some experts proposed devaluing VND by 2pct to 3pct in the first quarter of this year in order to stimulate exports. This information was disseminated and mistaken for an official SBV’s plan. The result was a sharp increase in exchange rates for recent few days, after a a long period of stability.

The arrest of BIDV chairman, Tran Bac Ha, added to worries and encouraged many people to divest from the securities market, switching to USD bank deposits or gold.