Vietnam central bank likely 'sold $1.5 bln' to maintain dong rate

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A US dollar transaction at a bank in Hanoi. Photo: Ngoc Thang A US dollar transaction at a bank in Hanoi. Photo: Ngoc Thang

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Vietnam's central bank may have sold up to US$1.5 billion to commercial banks amid year-end high demand to keep the Vietnamese dong stable, according to a SaigonTimes report.
SaigonTimes quoted an unnamed deputy general director of a commercial bank as saying that the State Bank of Vietnam (SBV) has been selling the dollar at VND21,400, around 40 dollar below the reference rate, since last week.
His bank received the central bank’s form for buying dollars last week, and made some purchases to prepare for importers’ year-end demand, the reported quoted him as saying.
SaigonTimes also quoted an unnamed SBV leader who confirmed that the central bank has sold dollar to commercial banks which had a short foreign currency position.
The SBV source refused to answer how much dollar the central bank has sold. 
Many banks said their dollar demand has risen since late October.
Many businesses have asked for buy dollar to import commodities for the Lunar New Year (Tet) shopping season which peaks in February this year.
The demand also increased because businesses imported more oil amid price drops.
At a press conference on November 27, Nguyen Thi Hong, SBV deputy governor, said banks have been informed about the selling of dollar.
“We are summarizing banks’ demand to decide how much [dollar] to sell to stabilize the market,” Hong said.
An HSBC report on Vietnam's macroeconomic prospects earlier this month said the dong will remain stable in the short term thanks for steady foreign investment and current account surpluses.

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