Vietnam’s forex stability unaffected by standoff with China: official

Thanh Nien News

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A customer counts dollar notes at a bank in Ho Chi Minh City. Photo: Dao Ngoc Thach A customer counts dollar notes at a bank in Ho Chi Minh City. Photo: Dao Ngoc Thach
The dong-US dollar exchange rate will remain stable despite China-Vietnam tensions in the East Sea, a banking official said.
“Chinese banks currently operating in Vietnam are much smaller than other banks [owned by the Vietnamese and from other countries],” Thoi Bao Kinh Te Saigon quoted Dao Quoc Tinh, deputy chief inspector of the central bank as saying on Thursday.
“Hence, [Chinese lenders'] influence on Vietnamese companies is not big, not remarkable. In addition, the amount of dollar loans issued by Chinese banks is tiny,” Tinh said during a seminar in the northern province of Vinh Phuc.
He said that Vietnam now has foreign currency reserves of more than US$36 billion –a record figure.
“With such large reserves, I can affirm that the foreign exchange market remains stable due to the central bank governor’s commitment,” Tinh said.
Tinh’s remarks were made in response to Nguyen Minh Phong, an economist, who expressed his concerns at the seminar on the risk of a collapse of the local foreign exchange market in case China opts to engage in “psychological warfare.”
Last week Nguyen Van Binh, Governor of the State Bank of Vietnam, vowed to keep the dollar/dong exchange rate stable until the end of this year.
The central bank will make adjustments if necessary; but the total change won't exceed two percent, he said.
Vietnam is now home to nearly 60 branches of foreign banks; two of them are owned by the Chinese state.
Vietnam and China are locked in a standoff prompted by China's unilateral dispatch of a giant oil rig in Vietnam’s exclusive economic zone in early May.
Chinese escort ships have since rammed Vietnamese vessels tasked with stopping the rig from illegally operating in Vietnamese waters.
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