Exchange rate may vary between 3-4% in 2016: VEPR

In its macro-economic report, the institute analyzed that the foreign exchange market operated in a relatively stable manner in the first half of Q4, 2015 and exchange rates at commercial banks and free market declined since the yuan devaluation. 

However, highly increasing demand for foreign currencies at the year-end imposed pressure on the exchange rate. USD prices at commercial banks were close to the ceiling floor applicable in December, 2015.

The State Bank of Viet Nam on December 31 issued Decision 2730/QD-NHNN on the application of a daily reference rate instead of maintaining a fixed rate for a long period of time. The trading band will be within a three percent range above or below the central rate.

According to the VEPR, the move was a remarkable progress towards market-based management.  

The VEPR also forecast that in 2016 the foreign exchange market may have latent risks, especially potential crisis from emerging markets.  

The inflow of investment showed positive signs following the conclusion of negotiations for Trans-Pacific Partnership Agreement and strong production shifting from China./.

By Khanh Phuong