The deputy governor of the National Bank reassures: Enterprises can rest assured about the exchange rate

In 2024, exchange rate pressure is expected to ease. The Deputy Governor of the National Bank for Finance and Banking assures: Businesses can rest assured about the exchange rate Tram Anh • January 6, 2024 16:29 In 2024, exchange rate pressure is expected to ease.

VND (HM:) is a currency that will hardly lose value in 2024

According to data from data company WiGroup, as of the end of 2023, the central exchange rate has increased by 1.1%, the bank dollar buying and selling rate has increased by 3.04% to 3.08%, and the foreign exchange rate has increased by 3.04% to 3.08%. Free market trading volume increased by 4.1 – 4.3%.

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In the first half of 2023, the central exchange rate fluctuated between 23,600-23,700 VND/USD, and the commercial bank selling exchange rate fluctuated between 23,700-24,000 VND/USD.

However, since August, the exchange rate has experienced many violent fluctuations. The overnight inter-bank exchange rate is close to 0%/year, and the USD-VND interest rate spread has increased to more than 5%. The selling rate of commercial banks rose from 23,850 VND/USD to a peak of 24,760 VND/USD at the end of October.

Faced with this situation, the State Bank (SBV) has issued a large amount of government bonds since the end of September 2023. From September 21 to November 8, 2023, the National Bank issued a total of 361 trillion VND in bills, with an average interest rate of 1.04%/year.

At the same time, the domestic foreign exchange supply increased significantly at the end of the year, which helped alleviate the pressure of devaluation of the Vietnamese dong. The World Bank predicts that Vietnam’s remittances may reach US$14 to US$15 billion in 2023. At the same time, the International Monetary Fund (IMF) predicts that Vietnam’s foreign exchange reserves will reach approximately US$100 billion in 2023.

In addition, data from the Ministry of Industry and Trade show that the total import and export volume in 2023 is expected to reach US$683 billion, of which exports are expected to be US$354.5 billion and imports are expected to be US$328.5 billion. According to statistics from the General Administration of Statistics, FDI capital reached US$20.25 billion in the first 11 months of 2023. It is expected that 2023 will be the year with the highest level of actual FDI capital in place.

Affected by this, by the end of 2023, the selling interest rate of commercial banks had dropped to 24,420 VND/USD, a decrease of 1.4% from the peak of that year. The central exchange rate also fell to 23,866 VND/USD, down 1% from its peak in late October.

At a press conference to deploy the 2024 banking sector tasks, Mr. Dao Minh Tu, Deputy Governor of the National Bank, said that the Vietnamese dong maintains its value and many countries have great potential, even in the G7 countries with high and low inflation. Prices have depreciated significantly, with many countries’ currencies depreciating by 12-17%. The Vietnamese Dong has only depreciated by about 2%, which is a very low level.

Mr. Tu said: “The National Bank has stabilized the foreign exchange market and limited short-term large fluctuations in the exchange rate. The currency value will be stable in 2023.”

Don’t let the mentality of holding foreign exchange wait for the exchange rate to rise.

Describing the future direction of monetary policy, Bank Negara Malaysia Deputy Governor Tao Mintu said the institution is unswervingly committed to ensuring macroeconomic stability and exchange rate stability.

“Currently, gold prices and US dollar prices are rising with world prices, and market supply and demand are sometimes high and sometimes low. However, companies can rest assured about the exchange rate. The current exchange rate is still fluctuating within the allowable range, and we will definitely try to avoid holding foreign exchange and waiting for the exchange rate. Appreciation psychology. Currently, foreign exchange reserves are abundant, FDI capital flows continue to grow, and other sources of foreign exchange are also showing positive development… These are the basis for stable exchange rates.”

Despite some concerns about currency fluctuations, Bank Negara leaders said the market must accept ups and downs and that if left to become rigid, it would no longer be a market economy. The exchange rate cannot remain constant.

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