SBV announces core exchange rate

The State Bank of Vietnam (SBV) has issued a decision on announcing a core exchange rate of the Vietnam dong against the US dollar and cross exchange rate of the Vietnam dong against several foreign currencies.

Accordingly, the SBV will announce the core exchange rate daily to lay a basis for credit institutions and foreign banks’ branches, which are allowed to operate and supply foreign exchange services, to define US dollar - Vietnamese dong exchange rates for buying and selling.

The core exchange is identified based on references to developments of the weighted average of the foreign exchange value in the interbank foreign currency market, those to foreign exchange rates of several currencies of countries with large investment and notable lending, borrowing and trading relations with Vietnam, as well as the macro-economic and monetary balance in line with the monetary policy.

The new exchange rate management approach allows the exchange rate to fluctuate daily in accordance with local foreign currency demand and the world market’s changes while ensuring the SBV’s managing role. The core exchange rate announcement is one of the SBV’s synchronous measures to elevate the Vietnamese dong’s status, and stabilise the exchange rate and the foreign currency market, contributing to stablising the macro-economy and facilitating production and trade of businesses.

The SBV also affirmed it will take synchronous measures and monetary tools and be ready to sell foreign currencies when needed to stabilise the foreign currency market and the exchange rates within allowed margins. The decision is effective from January 4.

(Source: VNA/NDO)