Market responds to SBV’s forex adjustments

The State Bank of Vietnam made two adjustments to the exchange rate of the Dong within just 1 week. Yesterday, the currency’s value was raised by 1 percent while the exchange band was loosened from +/-2% to +/-3%. Experts point out such adjustments were unprecedented, and were intended to lead the market amid heightened external uncertainties. In our next report, let’s hear how the market has responded to such changes.

Vietcombank adjusted its listed exchange rate 8 times on August 19^th. Though compared to previous days, liquidity in the foreign exchange market declined, trading volume still stood at around 100 to 130 million USD per day.

Pham Thanh Ha, Deputy General Director, Vietcombank said: "We are moving from a net-buy position to balanced position, and to some extent, even a net-sell."

An import-export company, Hanoi Trade Corporation, or Hapro, believes this forex adjustment will bring opportunities to enterprises, as the payment differences are quite large within a day.

Nguyen Huu Thang, Chairman of the Board, Hanoi Trade Corporation said: We export goods every day. The moment the exchange rate is adjusted, it will immediately and significantly boost exports, especially when the payments we receive are not denominated in Dong. This is our immediate gain.

Following the Central Bank’s forex adjustment, commercial banks have increased their listed rates. Most of them have made more than one adjustment due to changes in trading volumes.