SBV willing to sell foreign currencies if necessary

11:29 | 28/09/2015 Economy

The State Bank of Viet Nam (SBV) will continue launching synchronous measures and monetary policy tools, and is willing to sell foreign currencies if necessary, to ensure the balance of foreign currency demand and supply as well as eliminating wrong prospects on exchange rates to stabilize foreign currency market within the allowed band.

SBV willing to sell foreign currencies if necessary

According to the SBV’s press release on September 20, the US’s Federal Open Market Committee (FOMC) concluded its two-day meeting, deciding to leave the Federal Funds Target Rate unchanged due to the country’s failure to achieve its 2% inflation goal and recent fluctuations in the global financial markets.

A press release following the meeting said: “Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term”, and the FOMC “is monitoring developments abroad.”

As such, global economic and financial developments will continue to play an important role in the Federal Reserve System (FED)’s consideration of interest rate hikes in the time ahead, the Vietnamese central bank said.

The SBV stressed the possibility that the FED’s interest rate increase was reflected in the interest and exchange rate fluctuations in the international financial markets since late 2014, including the SBV’s adjustments to the average inter-bank VND/US$ exchange rate and VND/USD trading band.

The VND exchange rate now has enough room to be flexible to cope with negative impacts from the domestic and foreign markets through early 2016.

The FED’s rate rise in the near future will not affect the SBV’s exchange rate stabilization orientation, the central bank emphasized in its press release./.

Source: VGP