US dollar rate cut to three-month low at VND22,320 to VND22,390

Customers at the Agribank's main office in the central province of Ha Tinh. Local commercial banks yesterday cut their US dollar exchange rate by VND30-40 to the three-month low. - VNA/VNS Photo Tran Viet

This was despite a rise in the central bank's daily reference rate yesterday.

Vietcombank and BIDV yesterday listed the buying/selling rates between VND22,320 and VND 22,390 per dollar, down VND40 against the previous session.

Vietinbank also cut the buying rate by VND20 to VND22,330 and VND40 for the selling rate to VND22,405.

The rates at ACB and Eximbank were quoted between VND22,301 and VND22,390, a VND40 reduction against the previous session.

The same trend was also seen in many other smaller-sized banks such as DongABank and Techcombank.

In contrast to the reduction at commercial banks, the daily reference rate quoted by the State Bank of Viet Nam yesterday rose by VND2 to VND21,910.

The rates at the flea market were also much higher, staying between VND22,490 and VND22,510 per dollar.

From the beginning of this year, the central bank applied a new exchange rate policy in which it set a "central exchange rate" or a reference rate every day, instead of maintaining a fixed rate for a long period of time. The trading band of the new rate continues to be plus or minus three per cent.

For the past few weeks after the new policy had been applied, the exchange rates quoted by commercial banks and the central bank have moved in the opposite direction.

By yesterday, the US dollar/dong central rate stood at VND21,910 per dollar, up VND20 against the end of last year. However, the rate quoted at commercial banks in the period decreased roughly VND130 per dollar against the end of 2015.

Director of the State Bank of Viet Nam's Monetary Policy Department Bui Quoc Dung attributed the central rate rise to the impact of the global market including the devaluation of the yuan, a decline in the Chinese securities market and a rise in US dollar value.

As for the decline in the exchange rates of commercial banks, he said, it was thanks to a positive response from the market to the new exchange policy, which has helped reduce the dollar speculation in the domestic economy and encourage organisations and individuals to sell the greenback to commercial banks.

The move has contributed to creating good liquidation in commercial banks and the domestic forex market for the past weeks, he said.