The exchange rate may increase at the range of 2% - 4% in 2017
Vietnam may tap foreign reserves to bolster currency: central bank | |
Fluctuations in exchange rate: Enterprises need to be proactive | |
Not to worry about rising rate |
(Illustration) |
Although there are certain changes from time to time, 2016 was recognized as a relatively stable year of the exchange rate and foreign exchange markets. At the end of March 12-2016, common rates at 22.790 to 22.800 VND/USD, increased by 1.1% compared to the end of 2015.
This increase mainly came from early November, due to pressure from the unexpected results of the US presidential election with the winning of Donald Trump - the Republican candidate and the interest rate increase by FED in December which comes with the oriented roadmap to raise interest rate sharper than expectation in 2017. Along with that, the pressure from the significant raise of dollar price on the world market and seasonal factors at the end of the year to meet payment demands is also high.
Since early 2016, the State Bank has formally adopted a new operating mechanism with daily central exchange rate determined based on the reference of the weighted average exchange rate on interbank market and the rate on international market of some currencies of countries which have large trading, borrowing, repayment, investments relations to Vietnam together with the macro-economic balance, currency, monetary policy objectives.
Accordingly, before the heating up of the exchange rate in the commercial banking system, since mid-August, the central reference rate is continuously adjusted by the State Bank. This movement is considered as a flexible adjustment from the authorities to orient and wait the market in front of the considerable pressures on the exchange rate and the foreign exchange market which was expected to happen at the end year as above noted.
Experts of Vietcombank Securities Company (VCBS) assessed, in 2017, the pressure from the outside and the world market will continue to be the biggest factor which put pressure on the exchange rate and foreign markets exchange with the center being the strengthening of the US dollar accompanied by the recovery of the US economy and the FED's interest rate increase roadmap with the expected time of rate increase more than in 2016. Along with that is the sharp decrease of many other foreign currencies in the area.
Besides, when the world market has more events and volatility, speculative sentiment is likely to appear. This will create a certain pressure on the market in the short term and require the State Bank to have the appropriate, flexible and close operating decisions.
Meanwhile, experts also maintain the expectation that the supply of foreign currencies in 2017 will be at an abundant level and continue to be a strong support factor for the exchange rate. Except for the US, many big countries in the world, especially in Asia, are maintaining quite strong expansionary policies. Accordingly, with the advantage of economic and politic stability, relative geography, Vietnam is forecast to continue to be a bright spot to attract investment capital. Furthermore, 2017 will be the year with the process of equitization, divestment of state capital which will continue, especially in the major corporations with foreign investor interest. This movement promises to bring a large supply of foreign exchange for Vietnam in the incoming period.
Deputy Governor of the State Bank: the exchange rate could be reverse in near future VCN – Before the significant increasing of the exchange rate between USD and VND in 2 weeks, ... |
On that basis, although the VND in 2017 is likely to come with more pressure than the previous period, but with the prospects of abundant supply of foreign exchange will help the State Bank to be more active in managing and stabilizing the market when necessary. Accordingly, VCBS predicts the devaluation rate of VND in 2017 will be around 2% - 4%.
Related News
To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits
06:15 | 28/04/2024 Import-Export
Capital flow "hits the target" for businesses to recover
11:23 | 27/01/2024 Finance
State Bank assigns credit growth target of 15% for banks
10:46 | 16/01/2024 Finance
Interest rate management: From high rates to loosening
13:50 | 17/01/2024 Finance
Latest News
Exports, FDI remain Vietnam’s bright spots: HSBC
17:16 | 02/05/2024 Headlines
Growth engines rev up in first four months
17:12 | 02/05/2024 Headlines
Vietnam fulfills Chairmanship of Asia Pacific Group at UN for April
19:38 | 01/05/2024 Headlines
Startups gradually mature in international markets
08:22 | 01/05/2024 Headlines
More News
Việt Nam to promote local tourism
13:37 | 30/04/2024 Headlines
April 30 Victory – Glorious milestone in national history
13:34 | 30/04/2024 Headlines
Vietnam secures remarkable economic successes since national reunification
13:31 | 30/04/2024 Headlines
Precious significance of Điện Biên Phủ Victory
16:44 | 29/04/2024 Headlines
Tourism sector surges with over six million visitors in four months
16:40 | 29/04/2024 Headlines
Removing the yellow card, seafood businesses commit to "say no to IUU"
07:51 | 29/04/2024 Headlines
Vietnam ranks third in Southeast Asia in startup investment attraction
14:57 | 28/04/2024 Headlines
All-out efforts needed to get IUU yellow card removed: Minister
14:55 | 28/04/2024 Headlines
Vietnam expected to become e-commerce powerhouse in Southeast Asia
19:49 | 27/04/2024 Headlines
Your care
Exports, FDI remain Vietnam’s bright spots: HSBC
17:16 | 02/05/2024 Headlines
Growth engines rev up in first four months
17:12 | 02/05/2024 Headlines
Vietnam fulfills Chairmanship of Asia Pacific Group at UN for April
19:38 | 01/05/2024 Headlines
Startups gradually mature in international markets
08:22 | 01/05/2024 Headlines
Việt Nam to promote local tourism
13:37 | 30/04/2024 Headlines