Tú said that the foreign currency reserves are enough to carry out intervention. “Intervention can be implemented even from today,” Tú said.

The global political and economic situations have caused the currencies of many countries to depreciate significantly, including those of strong economies, by around 3-9 per cent. Việt Nam is no exception with the Vietnamese đồng losing 4.9 per cent against the US dollar compared to the beginning of the year. 

Tú said that exchange rate management must ensure stability, with appropriate ups and downs to minimise impacts and ensure balance.

Phạm Chí Quang, Director of the Monetary Policy Department, said the SBV on April 19 announced the foreign currency intervention plan on its website. Accordingly, the SBV will sell foreign currencies to credit institutions to close their negative positions at the exchange rate of VNĐ25,450 buying a dollar.

This is a bold measure by the SBV to relieve market pressure and ensure smooth foreign currency supply, Quang said, adding it would continue closely watching foreign currency markets to ensure the market’s demand and control inflation.

Huge fluctuations of exchange rates significantly affect enterprises with large debts in foreign currencies.

Đặng Ngọc Hoà, Chairman of national carrier Vietnam Airlines said that a 1 per cent increase in exchange rate causes the airline to lose an estimated VNĐ300 billion.

The SBV announced the exchange rate at VNĐ24,260 buying a dollar on Friday, an increase of VNĐ29 compared to Wednesday. Thursday was a national holiday. With a margin of 5 per cent, the ceiling rate is VNĐ25,473 and the floor rate is VNĐ23,047.

At BIDV the VNĐ/USD was listed at VNĐ25,130 for buying and VNĐ25,440 for selling on Tuesday, an increase of VNĐ100.

At Vietcombank, the VNĐ/USD exchange rate was listed at VNĐ25,070 for buying and VNĐ25,440 for selling, unchanged from Wednesday.

Gold auction to be carried out next Monday

Đào Xuân Tuấn, Deputy Director of the Foreign Exchange Management Department, said that the gold auction will be implemented next Monday.

The central bank will send notices to 15 gold businesses eligible for participating in the gold auction. The preparations are all completed, he said.

After 11 years of suspension, gold auction is carried out again as a measure to increase gold supply to the market aiming to stabilise skyrocketing gold prices in the domestic market and narrow the gap with world prices.

With regard to information that some gold stores close their doors recently when inspection is being carried out with an aim to handle violations, Tuấn said that the State Bank asked relevant ministries and agencies, including the Ministry of Finance, the Ministry of Public Security, and the Ministry of Industry and Trade, to enhance cooperation on management of the gold market following the Prime Minister’s request.

According to the SBV's Deputy Governor, gold prices are on uptrend over the expectation that the US Federal Reserve will cut rates this year, the move of some central banks to stock gold and geopolitical tensions, making gold a safe haven.

He said the central bank is implementing a number of solutions to stabilise the domestic gold market and ensure its transparent, healthy and efficient operation.

Besides increasing gold bullion supply through auction, the SBV also focuses on ensuring raw materials for jewellery production and export, asking gold businesses to issue e-invoices for every transaction, prevent smuggling of gold, implementing probes to prevent speculation and gold price manipulation.

At a recent meeting about the gold market, the PM asked the State Bank to promptly implement solutions to effectively manage the gold market, especially handling the existing huge gaps between SJC gold prices and world prices.

Rates

Tú said that the SBV will continue to keep the operating interest rates unchanged after four cuts in 2023 in the context that the world rates remain high, allowing credit institutions to lower lending rates to aid the economic recovery.

As of March 31, deposit rates averaged around 3.02 per cent per year, 0.5 percentage points lower than the end of 2023, while lending rates averaged around 6.5 per cent per year, 0.6 per cent lower.

Credit growth is positive in March after slowing in the first two months of this year. By March 29, credit growth reached 1.34 per cent compared to the end of 2023.

The SBV will continue to manage interest rates in accordance with market developments, macroeconomic situation, inflation and monetary goals, together with flexible exchange rate management policies to stabilise the market, ensure macroeconomic stability, control inflation, ensure system safety and promote economic growth.

Tú said that the SBV will extend the policy of allowing commercial banks to keep debt classifications for struggling businesses for another six months, meaning to the end of this year, in the context that enterprises are still in difficulty and need more time to repay debts. — VNS