VINACHEM

With a sharp depreciation of the US dollar against the Vietnamese đồng, the State Treasury has continuously bought large amounts of the greenback from commercial banks.

This week, the Treasury announced it would purchase the dollar from commercial banks for an expected maximum value of US$100 million.

The purchase was a spot trade on September 12, and the expected payment date is September 16. Based on the State Bank of Vietnam (SBV)’s dollar purchasing price of VNĐ23,400 per dollar, it is estimated that the State Treasury will spend VNĐ2.3 trillion to carry out this transaction.

This was the third time since the beginning of this year that they have announced the purchase of the dollar from commercial banks. Last week, it offered to buy a maximum of $150 million and in mid May, $100 million.

The State Treasury offered to buy foreign currency in the context of the sharp decline in the USD/VNĐ exchange rate in recent weeks.

Currently, the USD/VNĐ exchange rate on the interbank market has dropped to VNĐ24,565 per dollar. The interbank USD/VNĐ exchange rate decreased by about three per cent compared to the peak period at the end of May and by nearly two per cent since the beginning of August.

The exchange rate listed at domestic commercial banks has also continuously fallen. The dollar selling price listed at banks is around VNĐ24,355 per dollar, while the buying price is at VNĐ24,725 per dollar. Since the beginning of August, the dollar price at banks has decreased by more than VNĐ500, equivalent to a decline of more than two per cent.

The exchange rate on the unofficial market has also decreased sharply in recent trading sessions. It is currently trading at VNĐ25,140 per dollar for buying and VNĐ25,240 for selling.

In the context of the cooling exchange rate, the SBV has also taken a more relaxed approach to monetary policies.

The SBV announced late last month that commercial banks whose outstanding loans have reached 80 per cent of the credit growth quota allocated by the SBV will be automatically allowed to expand credit room based on their ranking.

On the open market operation (OMO) channel, the SBV has also proactively stopped issuing on the treasury bill channel and reduced interest rates on the OMO channel to support liquidity for the banking system. — VNS