VietNamNet Bridge - The watchdog agency has reassured the public, saying that the dong/dollar exchange rate will not lose more than 2 percent of value by the end of the year and that the foreign exchange reserves have reached $37 billion.

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Vietnam’s foreign exchange reserves reach $37 billion, 10 tons of gold

Following a statement by the State Bank that the dong won’t depreciate further this year, deputy chair of the National Finance Supervision Council Truong Gia Phuoc confirmed that there was no pressure on the dong/dollar exchange rate, and that the dong value stabilization was within reach.

The statement was made in the context of the continued increase in the dollar prices quoted by commercial banks. The dollar price has climbed to VND21,795-21,860 per dollar (buy & sell), which is just VND30 per dollar below the ceiling level. 

Meanwhile, in the black market, the dollar was now traded at VND21,900-21,920.

Phuoc, in an interview given to the local press, said no problem existed in the dollar supply and demand.

By mid-July 2015, Vietnam had an excess of imports over exports reaching $4 billion, while the figure was forecast to climb to $5-7 billion by the end of the year. 

Meanwhile, kieu hoi (overseas remittances) is expected to reach $12-14 billion.

“We absolutely can offset the trade deficit with the high overseas remittances. The general current balance will still be in surplus, $4-5 billion at least,” Phuoc said.

Phuoc also said that the capital balance was always in surplus. 

As such, this will lead to a surplus in the national payment balance, estimated at $5-7 billion.

“In short, the supply will still be higher than the demand,” he said.

Meanwhile, Thoi Bao Kinh Te Sai Gon quoted Governor of the State Bank of Vietnam Nguyen Van Binh as saying that the foreign exchange reserves had reached $37 billion by the end of July. If counting gold, about 10 tons, and Treasury & banks’ deposits at the State Bank, the figure would be $40 billion.  

This was the first time since late last year that the head of the central bank has publicized the updated figure. This was also the first time the central bank made announcement about the amount of gold in reserves.

Prior to 2012, Vietnam had almost no gold in reserves, though the gold deposits at commercial banks were large. A joint stock bank once had 30 tons of gold from people’s deposits.

The publicized figure has disposed of the worry that Vietnam’s foreign exchange reserves have decreased due to the high trade deficit in the second quarter of 2015.

In late 2015, the State Bank announced that the foreign exchange reserves had reached $36 billion.

Thanh Mai