Vietnam Central Bank Buys in $1.2 Billion to Enrich Reserve Fund

The Vietnamese central bank has boosted purchasing foreign currency to strengthen its forex reserves.


        The SBV has bought in $1.2 billion since the beginning of this year. Photo: Internet

The State Bank of Vietnam (SBV), the country’s central bank, last week bought in $870 million worth of foreign currency from local commercial banks, bringing the total purchase to nearly $1.2 billion since the start of this year, the Saigon Times reported.

The SBV’s Operations Center maintains its buying price of the U.S. dollar at 22,575 dong a dollar and its selling price at 22,807 dong a dollar, below the SBV-set ceiling.

The regulator’s mid-point USD/VND rate has been on the decline over the past week, standing at 22,187 on January 24, down six dong from last weekend. With a band of +/-3%, banks can quote the greenback at between 21,521 and 22,853 dong a USD.

Along with hikes in dong-denominated interest rates, the abundant supply of foreign currencies has facilitated the SBV to buy in forex to enrich its reserve fund. In addition, the U.S. dollar has been weakening on international markets after the inauguration of President Donald Trump.

Prime Minister Nguyen Xuan Phuc at the end of last year tipped that Vietnam’s forex reserves reached an all-time high of $41 billion. With the fresh purchase, Vietnam’s reserve fund might have hit $42.2 billion.

Vietnam’s imports increased 5.2% year-on-year to $174.11 billion last year, translating into $3.34 billion per week. This means that Vietnam’s forex reserves can cover 12.6 weeks of imports.

Tuan Minh / BizLIVE