VietNamNet Bridge - The dong/dollar exchange rate remained stable for most of 2016 thanks to important government and State Bank policies, and resources of the national economy.

Analysts said that the forex market was more peaceful this year than ever before.   The dong/dollar exchange rate was stable in a year when the global forex markets, from Europe to Asia to the US, fluctuated strongly. 

The UK pound value plunged, while the euro fell to the 14-year deepest low and the Chinese yuan decreased to the record low level in the last eight years in comparison with the greenback. 

“There was no big fever attack. The liquidity was plentiful. It was easy to buy dollars from banks if you could show necessary documents. There was no chaos on the free market,” said Nguyen Van Hieu, the owner of a car part import company in Hanoi.

International institutions and Vietnamese experts in early 2016 all warned that the dong/dollar exchange rate would be under pressure in the year. Some even predicted that the dong would depreciate by 5-7 percent, mentioning a ‘currency war’ triggered by China which repeatedly devaluated its yuan.

The dong/dollar exchange rate remained stable for most of 2016 thanks to important government and State Bank policies, and resources of the national economy.

However, contrary to predictions, there was no big change with the dong/dollar exchange rate in the first eight months of the year. Only two price increases were seen in the free market in the last four months of the year, including one in late August, when the dollar price surged to VND22,950 per dollar, and in early December, when dollar price once surged to VND23,350 on the free market.

However, the dollar price did not stay at the high price levels for a long time. 

Meanwhile, the dollar prices quoted by commercial banks hovered around VND22,700-22,800 per dollar.

At the moments when the dollar price increased, the State Bank reassured the public that it would sell dollar to stabilize the market. However, a senior official of the State Bank said no one wanted to buy the dollars offered by the bank.


Huynh Minh Tuan from VnDirect Securities Company also said that the Vietnamese forex market was stable in 2016, which was a contrast to the world market.

According to Tuan, the new exchange rate mechanism applied by the State Bank since the beginning of 2016 helped create flexibility and ease the influences caused by events in the world market. Brexit and the sharp depreciation of the Chinese yuan had no considerable impact on the domestic market.

Vietnam’s forex reserves, as stated by PM Nguyen Xuan Phuc in late October, have exceeded $40 billion, the highest level so far. 

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