After the State Bank of Vietnam (SBV) announced the adjustment of the average inter-bank VND/USD exchange rate by 1%, Deputy Governor Nguyen Thi Hong has granted an interview to the SBV Website on the afternoon of May 7. Following is the full text of the interview:
Question (Q): Could you point out the reasons for the SBV’s adjustment of the average inter-bank VND/USD exchange rate at this moment?
Answer (A): In regard to the time for adjustment, the SBV had carefully considered and seen that it as an appropriate time for the SBV to adjust the exchange rate; and the adjustment of the exchange rate by 1% is for the aim of proactively achieving the objectives of socio-economic development as well as for coping with the adverse impacts of the international financial market.
Q: In the recent days, the exchange rate has been on a trend of increasing to reach the ceiling exchange rate, then what is the cause?
A: Recently, the exchange rate in the domestic market has been on an upward trend. Based on the close monitor and analysis, the SBV asserted that the increase of the exchange rate is mainly due to psychological factors and market expectations. However, the exchange rate still has ranged within the setting band and the legitimate demand for foreign currencies of organizations and individuals are fully met.
Q: How did the forex market develop after the adjustment of the exchange rate of 1% this morning?
A: Right after the SBV announced the adjustment of the exchange rate by 1% this morning, the exchange rate was on a downward trend. By 2 p.m on May 7, the VND/USD exchange rate was 21,660/ 21,670 and all legitimate demands for foreign currencies of organizations and individuals are promptly and fully. The total transaction from this morning till 2 pm today was USD 700 million. This was a common trading volume in the market in the recent days.
Q : Could you talk about the orientations of monetary policy management of the SBV from now until end 2015?
A: In the coming time, the SBV will utilize the consistent measures and monetary policy tools to stabilize the exchange rate and foreign exchange markets on a new common exchange rate and continue to closely monitor market developments as well as the forecast of macro-economic and monetary developments.
Q: Thank you!
Translated by TLH