No dollar shortage in Vietnam's FX market: central bank

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Vietnam's foreign exchange market faces no looming shortage of dollars and enterprises are not accumulating the currency over inflation and other fears, a local newspaper cited a central bank official as saying.

"The forex market is going smoothly and supply and demand are well-balanced," the English-language Vietnamnews quoted State Bank of Vietnam Governor Nguyen Van Giau as saying in its Friday edition.

Giau was responding to a rumor about enterprises flocking to US dollars as a safe haven because of fears of rising inflation, a widening trade deficit and foreign exchange risks, the newspaper said.

Vietnam's inflation has slowed in recent months, with annual inflation in June at 8.69 percent while the consumer price index was up just 0.22 percent from May, the government's statistics office said on Thursday.

However, the trade deficit could widen to an estimated $6.7 billion in the January-June period, the Ministry of Planning and Investment said on the same day.

In May, the central bank pledged to keep the foreign exchange rate stable, suggesting that dollar liquidity had improved, enabling the central bank to buy $1 billion from banks to boost foreign reserves.

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