Illustrative image (Source: LienVietPostBank) Hanoi (VNA) – The foreign exchange market in Vietnam has heated up recently when the daily reference exchange rate set by the State Bank of Vietnam (SBV) continuously climbed to new record levels and the VND/USD rates listed at commercial banks also surged. * Why did the exchange rate rise? The SBV attributed the recent increases in the VND/USD exchange rate to negative information on the US-China trade negotiations which intensified concerns about the possibility of international trade disputes. At the same time, the devaluation of the Chinese yuan since the end of April also made psychological impacts on the domestic forex market, putting more pressure on the foreign exchange rate. Experts were also of the view that the rise in the exchange rate was mainly caused by the psychological factor amidst new developments in the international market. Analysts of the Bao Viet Securities Company (BVSC) said the recent fluctuations … [Read more...] about Forex rate under pressure of US-China trade tensions
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Indonesia strives to stop currency’s sharp plunge against USD
Indonesia's national currency rupiah (Photo: VNA) Hanoi (VNA) - Indonesia has spent 11.9 trillion rupiah (about 796.7 million USD) in total through several market operations to reduce the pressure from depreciated value of the national currency against the USD, the governor of the country’s central bank said on September 5. The operations were carried out by buyback mechanism on Indonesian notes (SBN) sold by foreign investors in the last several days, BI Governor Perry Warjiyo said. The buybacks were conducted on August 30-31 and on September 3-4, he added. Perry said in a hearing at the parliament that the operations aim to stabilise the foreign exchange market. The buyback mechanism was part of the central bank's intervention to respond to the rupiah exchange rate against USD, which has developed into a level far from its fundamental range, he said. Besides the buybacks, BI also conducted interventions in forex trade by assuring sufficient supplies of foreign … [Read more...] about Indonesia strives to stop currency’s sharp plunge against USD
Turkey hikes tax on forex deposits to prop up lira
Turkey on Friday (Aug 31) raised tax on foreign currency deposits in a bid to prop up the tumbling lira, in a presidential decision published in the official gazette. The lira has lost nearly 45 percent of its value against the dollar since the beginning of this year AFP/Yasin AKGUL The withholding tax on foreign currency deposits of up to six months was raised from 18 to 20 per cent, while tax on deposits of up to one year was hiked from 15 to 16 per cent, under the decision that came into force on Friday. Meanwhile tax on lira savings deposits of up to six months was brought down from 15 to 5 per cent. Tax on deposits of up to one year came down to 3 from 12 per cent, and to zero from 10 per cent on deposits of more than one year. The news helped the lira rebound slightly following earlier losses, trading Friday at 6.5 against the dollar and 7.6 against the euro. The embattled lira had tumbled almost 5 per cent in value on Thursday, trading at around 6.7 to the dollar, amid … [Read more...] about Turkey hikes tax on forex deposits to prop up lira
Central bank requests control on foreign currency loans
Governor of the State Bank of Vietnam (SBV) Le Minh Hung has recently directed the entire banking industry to strictly control foreign currency lending to better minimise dollar speculation and fight against dollarisation in the economy. It was estimated that outstanding foreign currency loans, mainly in US dollars, among banks, were significant at nearly 300 trillion VND (US$12.76 billion) - Source: cafef.vn According to the SBV’s current regulations, commercial banks can still provide short-term loans in foreign currencies to export firms that need funds for production and have turnovers in foreign currency until the end of this year. After receiving such loans, the exporters must immediately sell the amount of foreign currency borrowed to the lenders to get VND, using the spot forex trading method, except in cases where the foreign currency will be used to make payments. It was estimated that outstanding foreign currency loans, mainly in USD, of banks, especially … [Read more...] about Central bank requests control on foreign currency loans
SBV requests control on foreign currency loans
Governor of the State Bank of Viet Nam (SBV) Le Minh Hung has recently directed the entire banking industry to strictly control foreign currency lending to better minimise dollar speculation and fight against dollarisation in the economy. According to the SBV’s current regulations, commercial banks can still provide short-term loans in foreign currencies to export firms that need funds for production and have turnovers in foreign currency until the end of this year. After receiving such loans, the exporters must immediately sell the amount of foreign currency borrowed to the lenders to get Vietnamese dong, using the spot forex trading method, except in cases where the foreign currency will be used to make payments. It was estimated that outstanding foreign currency loans, mainly in US dollars, of banks, especially State-owned ones, were significant at nearly VND300 trillion (US$12.76 billion). VietinBank topped the list with outstanding foreign currency loans of VND109.978 … [Read more...] about SBV requests control on foreign currency loans
SBV’s forex policy aimed for macroeconomic stability
The State Bank of Viet Nam (SBV)’s exchange rate policy was aimed at ensuring macroeconomic stability, not just export growth, said Nguyen Thi Hong, the bank’s deputy governor. Hong made the statement following suggestions that the dong should be further weakened against the US dollar to support the country’s exports, especially given the recent devaluation of the Chinese yuan. According to Hong, the SBV had been monitoring several currencies as well as the yuan to set its daily reference exchange rates. Besides managing the forex market based on the daily reference rate, Hong said that SBV was also looking at other factors such as interest rates and liquidity, as well as fiscal policies to ensure the country meets its macroeconomic targets. The SBV reported that by August 1, the central bank’s daily reference exchange rate of the dollar against the dong had risen by 1.1 per cent compared to the end of last year, while with the current trading band of +/- 3 per … [Read more...] about SBV’s forex policy aimed for macroeconomic stability
SBV intervenes in forex market
SBV intervenes in forex marketThe Saigon Times Daily A bank clerk is counting U.S. banknotes in this file photo. The central bank has intervened in the forex market by selling U.S. dollars to commercial banks - PHOTO: THANH HOA HCMC – The State Bank of Vietnam has officially intervened in the forex market by selling foreign currencies, especially U.S. dollars, to meet the demand of local commercial banks and stabilize the exchange rate, local media reported, citing an SBV representative. The representative said that the central bank has sold a small amount of U.S. dollars at VND23,050 each, or VND30-60 lower than the prices at commercial banks. In addition, the central bank today, July 17, slightly strengthened the local currency by reducing the reference exchange rate to VND22,643 per dollar, the second straight day the exchange rate has been revised down. As a result, the selling and buying prices of U.S. dollars quoted by commercial banks have softened to VND23,100 … [Read more...] about SBV intervenes in forex market
Experts concerned over foreign-currency credit surge
Experts concerned over foreign-currency credit surgeThe Saigon Times Daily Corporate borrowers have grown dependant on foreign-currency credits - PHOTO: TL HCMC – Economists have warned of forex risks as corporate borrowers have grown dependant on foreign-currency credits, resulting in a strong rise in foreign-currency outstanding loans since early this year, according to Lao Dong newspaper. Credit up, deposit down The financial reports of local banks show that deposits in foreign currencies, mostly in U.S. dollar, declined sharply in the first quarter, while lending in these currencies shot up. At the Bank for Investment and Development of Vietnam (BIDV), deposits in U.S. dollar fell 6.05%, while credit leapt 4.01% against early this year to more than VND96.7 trillion. Meanwhile, the Asia Commercial Bank saw its dollar deposits down 8.99%, while lending jumped by 8.19% to VND9.5 trillion. Some other banks reported the same situation, including Military Bank … [Read more...] about Experts concerned over foreign-currency credit surge
Stocks tumble, bonds and yen gain as trade war fears drive rush to safety
A pedestrian walks past at an electronics stock indicator, including a share prices in Tokyo. (Photo: AFP/Kazuhiro Nogi) Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, although the measures have a 30-day consultation period. Investors fear that the US measures could escalate into a trade war, with potentially dire consequences for the global economy. Beijing urged the United States on Friday to "pull back from the brink". "China doesn't hope to be in a trade war, but is not afraid of engaging in one," the Chinese commerce ministry said in a statement. China unveiled its own plans on Friday to impose tariffs on up to US$3 billion of US imports in retaliation against US tariffs on Chinese steel and aluminium products. MSCI broadest index of Asia-Pacific shares outside Japan fell 2.2 per cent as stocks across the region dropped. Shanghai shares were down 3.3 per cent. "The economic impact on both China and the US … [Read more...] about Stocks tumble, bonds and yen gain as trade war fears drive rush to safety
Forex rate pressure remains high: NA committee
Forex rate pressure remains high: NA committeeBy Tu Hoang - The Saigon Times DailyHANOI – The pressure on the foreign exchange rate remained strong and has tended to increase further lately, according to a research report of the National Assembly (NA) Economic Committee.The report conducted by a team headed by Chairman Nguyen Van Giau of the economic committee gave comments on the trend of Vietnam dong depreciating against the U.S. dollar in the upcoming time, including early 2012.The pressure was attributed to different factors, including inflation, trade deficit, foreign currency credit growth and money speculation.The research remarked that in the final months of 2011, the forex market witnessed a rapid rise in demand for foreign currencies, dominantly the U.S. dollar. The foreign money was in increasing need to repay matured loans, or to import goods, especially gold, for the year-end season given the price gap between local and global gold.Also, the rising demand for foreign … [Read more...] about Forex rate pressure remains high: NA committee