VietNamNet Bridge - Vietnam expects to have a surplus of $5 billion in international payments in 2015, which means there will be enough dollar supply in the domestic market.

Economists urge new exchange rate

Ha Huy Tuan, deputy chair of the National Finance Supervision Council, noted that, though the dong has been devalued by one percent, the dong/dollar exchange rate is still under pressure. 

The US dollar has been appreciating against other currencies, while the US FED reportedly is going to lift the dollar interest rate, possibly in June.

Le Dinh An from the Ministry of Planning and Investment believes the US dollar will continue rising, and the stronger dong will affect Vietnamese export competitiveness in the world market.

Meanwhile, commercial banks pay very low amounts for US dollar deposits. This prompts people to hoard dollars, which will influence the dollar supply-demand balance.

Dr. Tran Dinh Thien, head of the Vietnam Economics Institute, has suggested lifting the limit on the dong devaluation in 2015. 

The State Bank earlier this year stated that the dong will not depreciate by more than two percent this year. Meanwhile, it has devalued the dong by one percent.

Thien believes there is no need to set a limitation on the exchange-rate adjustment.

According to the expert, foreign-invested enterprises, which make up 65 percent of total export turnover and make payments in US dollars, will not bear the exchange risks. But for Vietnamese enterprises, which mostly export raw products, it will have an effect. 

Can Van Luc, a renowned economist, also noted that the central bank needs to be flexible in regulating the exchange rate policy. 

“It needs to devalue the dong by more than two percent, more sharply than promised, if it is necessary,” he said.

SBV: Vietnam capable of stable exchange rate

Nguyen Thi Hong, Deputy Governor of the State Bank, said at the Spring Economic Forum on April 21 that the dollar price was planning to decrease.

The US dollar has been appreciating against the euro, pound and Australian dollar, while tending to depreciate against Asian currencies such as the Japanese yen, Chinese yuan and Thai baht.

Hong said the dollar price has dropped to VND21,582-21,583 per dollar, which is VND200 per dollar lower than the ceiling level of VND21,673 per dollar. 

Meanwhile, there is no sign of dollar demand surge, which shows that the dollar price performance is within the State Bank’s control.

Replying to the economists’ opinions that it is necessary to devalue the dong further to support exports, Hong said the State Bank needs to consider many different factors, not only export and import, to decide whether to adjust the exchange rate.

Pham Huyen