The State Bank of Viet Nam yesterday raised the interbank exchange rate by VND20 to VND20,768 per dollar, its highest level this year.

It was the 12th increase since October 5.

The interbank dollar exchange rate has advanced VND140 per dollar, or 0.68 per cent, over the past two months since the central bank committed to keeping fluctuation under 1 per cent until the end of this year. Therefore, to meet its pledge, the dollar exchange rate will be allowed to surge 0.32 per cent or by VND66.

At commercial banks, dollar exchange rates yesterday listed higher than VND20,970, up VND21 over the previous day. Vietcombank and Vietinbank quoted the greenback at VND20,971/20,976 while Eximbank and ACB figures were VND20,953/20,963.

On the black market, the greenback stood at VND21,730/21,800 per dollar.

Experts said that the foreign exchange market will likely experience tension at the end of the year when demand for US dollars increased due to rising imports and repayment of foreign currency loans.

However, vice chairman of the National Financial Supervisory Commission, Le Xuan Nghia told Tuoi Tre (Youth) newspaper that the Government would indeed be able to keep rate fluctuation under 1 per cent.

Nghia explained that balance of payments was expected to see a surplus of US$4-5 billion this year, the first since 2007. The country's foreign exchange reserves were also estimated to be equal to 7.5 weeks of import cover compared to 3.5 weeks earlier this year, higher than that expected by the National Financial Supervisory Commission.

He said that capital accounts currently enjoyed a surplus of around $9 billion, alongside positive remittance.

While the Government fights inflation, it cannot let the exchange rate rise as sharply as during previous years, he noted.

Nghia explained that one of the factors which had pressurised exchange rates during recent days included foreign currency deposits being $7 billion lower than the amounts loaned out as of the end of September.

Local corporate borrowers were trying to buy dollars to repay their foreign currency loans while the central bank was willing to sell dollars to meet high demand, he said, adding thats the bank would use the balance of payments surplus to stabilise the forex market.

As for the domestic gold market, traders yesterday lifted the price to more than VND45 million per tael (1.2 ounces), up roughly VND1 million against the previous day in the wake of a rise of nearly $60 an ounce on the world market. SJC quoted gold at VND44.8/45.1 million per tael yesterday while Bao Tin Minh Chau listed at VND44.85/45.15 million.

VNS