A trade surplus and a proactive monetary policy kept the dong-US dollar exchange rate stable last year, and analysts are hopeful the situation would remain unchanged in 2013.
The State Bank of Vietnam last year fixed the rate at around VND21,000 to the dollar through the year, and the rate has stayed unchanged since the start of this year, being traded at 20,845 on January 23.
Chen Chia Ken, acting general director of the Phu Hung Securities Corp., was quoted by Dau Tu newspaper as saying the exchange rate could remain stable since Vietnam achieved a trade surplus for the first time in 20 years.
A surplus means there is a net inflow of foreign exchange, which exporters sell to buy dong, thus keeping the local currency robust.
As of the third quarter last year forex reserves more than doubled since the start of the year to US$23 billion, enough for 11 weeks’ imports.
Vo Tri Thanh, deputy head of the Central Institute for Economic Management, said the central bank could “definitely” keep the dong’s gain or loss against the dollar from exceeding 2-3 percent.
It has tightened dollar lending and set real interest rates [nominal rates less inflation] for dong deposits higher than for dollars, lessening interest in the greenback, he said.
Dong deposits at Ho Chi Minh City banks increased by 14 percent last year while dollar deposits shrank 6.7 percent.
In late November last year the central bank banned gold deposits at banks. Banks used to sell the gold deposited with them to plow back in their business, but then use dollars to import the metal when gold deposits would be closed en masse when prices rose.
Central bank governor Nguyen Van Binh has promised to keep the dong steady.
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