Forex market stable, no dollar shortage: official

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Vietnam's foreign exchange market has been stable sine March and commercial banks have a surplus of dollars, a central bank official said, rejecting dollar shortage concerns.

"All banks reported that foreign exchange demand has not increased rapidly recently," Nguyen Quang Huy, director of the State Bank of Vietnam's foreign exchange department, said in an interview published by the Vietnam News Agency Thursday.

"Rumors about companies hoarding US dollars on forex rate concerns are groundless," he said.

Banks now have plenty of dollar funds, Huy said, noting that they have made dollar swap deals with the central bank worth a total of around US$600 million.

All sources of forex inflows have been rising this year, including foreign investment, overseas remittances and tourism revenues, he said, citing figures from the central bank.

Overseas remittances, for instance, are expected to reach $3.6 billion after rising 30.5 percent in the first quarter, he said.

"Together with a determination in curbing the trade deficit, the increase in foreign exchange inflows will help the government improve the country's balance of payments this year," Huy said.

Loans rose 1.86 percent in May alone, during which period dollar loans rose 3.16 percent, according to the central bank.

As interest rates on dollar loans were lower than the rates on dong loans, many companies shifted to dollar loans, Huy said. However he said the growth of dollar loans was not too high and still "within control."

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