The SBV early this week resumed issuing bills on the open market operation (OMO) channel after about four months of pause. Specifically, on March 11 it issued nearly VNĐ15 trillion of 28-day T-bills with an interest rate of 1.4 per cent per year.

In the next session of March 12, the SBV continued to issue bills worth nearly VNĐ15 trillion with a term of 28 days and an interest rate of 1.4 per cent per year, raising the total value to be withdrawn out of the banking system to nearly VNĐ30 trillion.

According to experts, this move is aimed to support the foreign exchange rate, which has been under rising pressure recently, as the bill issuance has helped absorb liquidity in the interbank market to increase Vietnamese đồng-denominated interest rate, which has reduced the dollar speculation in the short term.

Right after the SBV’s move, the foreign exchange rate on both official and unofficial markets cooled significantly.

Specifically, on the official market, Vietcombank on March 13 listed the dollar price at VNĐ24,450 per dollar for buying and VNĐ24,820 per dollar for selling, down about VNĐ40 per dollar compared to last weekend.

On the unofficial market, the dollar price has also turned down. The dollar buying price on March 13 was VNĐ25,480, down about VNĐ20 compared to March 12, while the dollar selling price dropped sharply by VNĐ100 to VNĐ25,600 per dollar.

Previously, the dollar selling price on the unofficial market reached VNĐ25,700 per dollar, an increase of VNĐ1,000 compared to the end of 2022, equivalent to an increase of 4 per cent.

Despite the appreciation of the dollar against the đồng in the first months of this year, experts believe Việt Nam still has effective tools to proactively control the VNĐ/USD exchange rate in 2024.

Economist Phạm Thế Anh, head of the National Economics University’s Department of Economics, said Việt Nam can still be proactive with the VNĐ/USD exchange as the country has the advantages of a large surplus trade balance and relatively positive FDI disbursement. In 2023, Việt Nam's trade balance of goods had a surplus of more than US$28 billion, while FDI disbursement also set a record high of more than $23 billion, both favourable factors for the SBV to increase the nation’s foreign exchange reserves.

In 2024, production will gradually recover so imports will likely grow a bit faster than exports, but in general, the overall balance will still help Việt Nam take the initiative to regulate the VNĐ/USD exchange rates, Anh forecast.

According to estimates of VNDirect Securities Company’s analysts, Việt Nam's foreign exchange reserves are quite abundant, at about $95-96 billion, creating room for the SBV to respond if the dollar index (DXY) increases.

Therefore, experts believe the foreign exchange rate is probably not too big a problem for the Vietnamese economy in 2024. — VNS