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Vietnam has $37bn in foreign exchange reserves, plus 10 tons of gold: cbank

Sunday, August 02, 2015, 16:37 GMT+7
Vietnam has $37bn in foreign exchange reserves, plus 10 tons of gold: cbank
This photo shows a customer buying U.S. dollars from a transaction office of a Vietnamese bank in Ho Chi Minh City.

Vietnam’s foreign exchange reserves stood at US$37 billion at the end of July 2015, Nguyen Van Binh, governor of the State Bank of Vietnam (SBV), told local media earlier this week.

The country now has 10 metric tons of gold and other kinds of valuable papers as well, Binh told Thoi Bao Kinh Te Sai Gon (The Saigon Times) newspaper on July 28

It is rare for the head of Vietnam’s central bank to reveal to the media the most updated figures of the country’s foreign exchange reserves, which are often considered a national secret.

If gold, valuable papers, and deposits in foreign currencies by the State Treasury and other credit institutions at the central bank are included, the total value is worth up to $40 billion, Binh told Thoi Bao Kinh Te Sai Gon.

This will help the national monetary regulatory agency fulfill the commitment it gave earlier this year that the Vietnamese dong will not be devalued by over two percent against the U.S. dollar, he added.

"We have the resources to intervene in the foreign exchange market when needed and we’re ready to do so,” he said.

The SBV manages the exchange rate with a long-term vision by synchronously utilizing many tools such as interest rates and money supply, the governor added.

Late last year the foreign exchange reserves of Vietnam peaked at $36 billion.

There were some forecasts stating that the figure might go down due to rising trade deficits, which amounted to nearly $4 billion, in the first half of this year.

However, recently released figures showed that the foreign exchange reserves continued to rise and the SBV has kept buying foreign currencies in recent months.

The Research Center of the Bank for Investment and Development of Vietnam, which is the biggest partly private bank by assets with VND730 trillion ($33.58 billion) as of July, said in a report that the foreign exchange market will be fairly stable in the third quarter before it can appear more volatile in the last quarter.    

On average, exchange rates will remain at high levels and have the tendency to rise, according to the report.

The center added that the central bank might sell up to $5-6 billion, equivalent to the balance of the trade deficit of 2015 in a projected bad scenario, to stabilize the foreign exchange market in the last six months of this year so as to keep its word on shoring up the dong’s value.

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