Exchange rate falls as SBV withdraws cash through foreign currency selling channel
VOV.VN - The daily exchange rate for the US dollar against the local currency (VND) has dropped after the State Bank of Vietnam (SBV) moved to withdraw cash through open market operation (OMO) and foreign currency selling channels for the seventh consecutive session.
Transactions on October 26 saw the SBV net withdrew nearly VND30 trillion through OMO and foreign currency selling channels, thereby raising total cash of nearly VND139 trillion from October 18 to October 26.
The move is expected to maintain the liquidity of the banking system at a sufficient level and at the same time help the central exchange rate to decline after spiraling to VND23,703 per a US dollar on October 25.
The following day saw the SBV set the central rate at VND23,698, a decline of VND5 from the previous day. It continued to adjust the rate to VND23,693 per a US dollar on October 27, a further drop of VND5.
On the inter-bank system, October 27 saw Vietcombank list the buying rate at VND24,608 and the selling rate at VND24,888, both down VND5 from the end of October 26.
The central bank recently decided to revise up several interest rates by 1%, starting from October 25. This move aims to continue implementing synchronous measures, contributing to controlling inflation, stabilising the macro-economy and currency, whilst also ensuring the overall safety of the banking system.
This represents the SBV’s second interest rate hike within a month.
In line with this, the refinancing interest rate was set at 6% per year, with a rediscount rate of 4.5%, and overnight inter-banking lending rate of 7%.
The maximum interest rate for non-term and one-month deposits in VND is capped at 1% annually and 6% one to six month deposits.