Vietnam forex market needs stronger interventions: central bank

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More aggressive measures are necesssary to stabilize the local monetary and gold market as weak government interventions can prolong the instability, a central bank official says.

Ho Huu Hanh, head of the State Bank of Vietnam's Ho Chi Minh City branch, said at a meeting on Friday that the city's unofficial forex market is small compared to the foreign reserves of around US$9 billion that his branch is holding.

But despite its scale, this market was the source of many fluctuations.

Timely interventions and stronger measures from the central bank are needed to solve the problem once and for all and prevent negative impacts on other economic sectors, he said.

In order to stop a gold frenzy this month, the central bank decided to let local traders import gold to increase supply.

The central bank also said on November 9 that it's willing to supply foreign currencies to commercial banks.

At the Friday meeting, central bank representatives said that the bank will consider a request by traders to ease the gold import ban. They also said the bank will tighten control over trading in foreign currencies.

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