Vietnam’s central bank buys $6 bln since early 2023

The move has made an important contribution to creating excess liquidity in the market, thereby stabilizing the interest rate level in the interbank market, and supporting credit institutions to reduce deposit interest rates and lower interest rates. lending rate to the economy, said the bank’s representative.

By buying an additional $6 billion to add to foreign exchange reserves, the State Bank of Vietnam will have more ability to ensure the supply of USD for banks to meet import demand. This is very meaningful for the economy, Mr. Nguyen Quoc Hung, general secretary of the Vietnam Bankers Association, told Bloomberg.

According to credit rating company Moody's Investment Group, by the end of 2023, Vietnam's foreign exchange reserves are expected to increase to $95 billion.

The Vietnamese dong has recently appreciated, reflecting the nation's better external position. According to Nishad Majumdar, an analyst, and strategist at Moody's Singapore, this would make it easier for the SBV to replenish foreign exchange reserves that were depleted during the time of USD appreciation in 2022.

The International Monetary Fund estimates that Vietnam's foreign currency reserves were $88.3 billion in January 2023.

Late last year, in order to stabilize its dong currency, which had fallen to record lows as a result of world events, Vietnam was compelled to sell a sizable number of dollars to the market.

Between January and April, the economy achieved a trade surplus of $6.35 billion and FDIC of $5.85 billion.

Vietnam's foreign reserves might rebound and reach $102 billion by the end of this year, according to analysts at VNDirect Securities.