State Bank of Viet Nam expands exchange rate trading band

According to the SBV, since the beginning of 2022, the U.S. Federal Reserve System (Fed) and many major central banks have stepped up the roadmap to tighten monetary policy and rapidly increase operating interest rates.

Additionally, the Russia-Ukraine conflict disrupted global supply chains, increased gasoline and commodity prices, and caused out-of-control inflation in many economies. These events led to significant fluctuations in the international and domestic markets.

Against the backdrop, the SBV actively and flexibly applied solutions to maintain the stable and smooth operation of the currency, foreign exchange, and foreign exchange markets, thereby contributing to macroeconomic stability and controlling inflation.

To proactively cope with unpredictable developments in the international market and the tightening of monetary policy, on October 17, 2022, the SBV promulgated Decision No. 1747/QD-NHNN regulating the spot exchange rate between the Vietnamese dong and foreign currencies of authorized credit institutions.

Accordingly, the spot exchange rate band between the Vietnamese dong and the US dollar (USD) was adjusted from +-3 percent to +-5 percent.

The SBV said it will continue to closely monitor market developments, coordinate monetary policy tools, and be ready to sell foreign currency interventions to stabilize the market./.