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State Bank plans to increase dong to dollar value

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August 15, 2011

State Bank plans to increase dong to dollar value

VietFinanceNews.com - The State Bank of Vietnam plans to increase the value of the Vietnamese dong against the US dollar over the next four months in a bid to protect the value of the domestic currency, State Bank Governor Nguyen Van Binh told Sai Gon Economic Times this week.

"Since February, the real value of Vietnamese dong has risen slightly," Binh said.

"If necessary, the central bank will consider further adjustment of the exchange rate," he added. "The primary target of foreign exchange policy is to stabilise the dong and keep it under control, not to fix it. Confidence in the domestic currency has been fading and we must immediately restore that confidence, which is vital to economic stability."

Binh advised the public that holding onto the dong was the best policy to keep people from flocking to invest in gold and to reduce dollarisation of the economy.

Strategies to protect the dong would include deposit interest rate reform that created predictable interest rates at levels of around 14 percent for dong deposits and 2 percent for US dollar deposits, he said.

Recent dollar speculation on the foreign exchange black market was a move to take advantage of soaring global gold prices, he added.

"In fact, the demand for dollars to pay for imports is not high, and even petrol importers are not demonstrating a high demand for dollars," Binh said. "The nation's foreign reserves are sufficient to offset any imbalance in the supply of and demand for dollars."

The central bank bought up over US$4 billion in the first seven months of the year. At the Consultative Group Meeting in June, the International Monetary Fund estimated that Vietnam's foreign reserves totalled US$13.5 billion, equivalent to 1.5 months of imports. On August 14, banks quoted buy/sell rates of VND20,814/VND20,824 per dollar, while the greenback traded for under VND21,000 on the black market.

On August 9, as domestic gold prices soared to an all-time record of VND46 million (US$2,203) per tael, the dollar was traded at VND21,300 on the black market and around VND20,810 at banks.


yippee!!!!!!.....hearing China's got something in the works also.....


I hope this is an indicator that we are close with the Dinar as well....


the IQD is considered ASEAN, part of Asia currencies in economic circles.....


Okay now I just hope it goes 1 vnd to 1 usd or 1 vnd to .50 usd Razz


azdinar wrote:Okay now I just hope it goes 1 vnd to 1 usd or 1 vnd to .50 usd Razz

I'd be happy with .02 or .03 cents.....


I like to dream big


Dong gains as Vietnam’s central bank says foreign reserves rose

The Vietnamese dong climbed from a four-month low as the central bank said the nation’s foreign- exchange reserves have been bolstered by export earnings and remittances. Government bonds were steady.

The currency stockpile has “increased significantly, quite sufficient to intervene and stabilize the foreign-currency market in any event,” the State Bank of Vietnam said in a statement on its website today.

Higher reserves “will definitely help boost confidence in the dong,” said Lai Tat Ha, head of currency trading at Hanoi- based Vietnam Technological & Commercial Joint-Stock Bank. “It confirms the State Bank will continue to pro-actively intervene by anticipating the market’s real dollar demand.”

The dong gained 0.05 percent to 20,810 per dollar as of 3:47 p.m. in Hanoi, according to data compiled by Bloomberg. It fell to 20,820 yesterday, the lowest level since April 25.

The central bank set the dong-dollar reference rate at 20,618 today, unchanged since Aug. 10, according to its website. The local currency is allowed to trade up to 1 percent on either side of the fixing.

The yield on Vietnam’s five-year bonds was little changed at 12.57 percent, according to a daily fixing price from banks compiled by Bloomberg.


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