HANOI: The State Bank of Vietnam (SBV) has revised a circular regulating foreign currency transactions to make it more flexible and proactive in managing the foreign-exchange rate in response to changes in domestic and international market conditions.
The draft circular recently published for comments amends a circular stipulating foreign currency transactions on domestic foreign currency market among banks authorised to make foreign currency transactions.
According to the SBV, market conditions, exchange rate levels, and domestic and international interest rate differences are changing rapidly and unpredictably.
Therefore, the SBV wants to amend the current policy to increase flexibility and initiative in managing monetary and exchange rate policies in response to changes in domestic and international market conditions.
In some periods such as in 2022, the narrowing difference between the Vietnamese dong and US dollar-denominated interest rates limited the room for the market to determine the dollar-dong forward exchange rate, which might affect market liquidity.
The circular has detailed regulations on issues related to foreign-exchange management according to market developments, such as policy regulations on forward exchange rates and bases for determining forward exchange rate cap, which may limit the SBV’s ability to react to market fluctuations.
Therefore, in order to maintain flexibility and initiative in management and create more favourable conditions for market operations, the SBV has reviewed and amended Clause 3 of Article 5 under a circular.
At banks, the dollar selling price is currently listed in the range of 24,950 to 24,960 dong. — Viet Nam News/ANN