The State Bank of Vietnam (SBV) on Monday decided to adjust the trading band of the USD/VND spot exchange rate from plus or minus three percent to plus or minus five percent.

Thus, the USD/VND exchange rate can currently move either side of the mid-point, which is set daily, within a band of five percent.

Since early this year, the U.S. Federal Reserve (Fed) and many large central banks have tightened their monetary policies and increased interest rates.

Moreover, the Russia-Ukraine military conflict has disrupted global supply chains. In addition, the prices of fuels and other commodities have surged, causing high inflation in many economies and huge volatility in the local and international markets.

Therefore, the SBV has proactively and flexibly applied tools and solutions to ensure the stable and smooth operation of currency and forex markets.

The central bank aims to contribute to stabilizing the macro-economy, putting inflation under control and reaching targets in the country’s socio-economic recovery and development as stated in National Assembly Resolution 43 and Government Resolution 11.

“To adapt to the unprecedented developments of the international market, and plans to further tighten monetary policies and revise up interest rates of Fed and central banks [of countries] worldwide, the SBV on October 17 issued Decision 1747 regulating the exchange rate band of Vietnam dong and other currencies," the SBV stated in its statement.

“The central bank will continue keeping a close watch on the market’s developments, using monetary policies and being ready to sell foreign currencies to stabilize the market.”

The dollar has surged both at banks and on the unofficial market.

Banks have raised the greenback price by VND200-250 over last week and VND30 from Sunday for both buying and selling.

On the unofficial market, the U.S. dollar in Hanoi has risen by VND50 compared with the price on Sunday to reach VND24,550 for buying and VND24,830 for selling.

On Monday, the Bank for Foreign Trade of Vietnam (Vietcombank) quoted the buying rate at VND23,980 and the selling rate at VND24,260 per U.S. dollar.

The rates at the Bank for Investment and Development of Vietnam (BIDV) are now VND24,180 and VND24,460, respectively.

The dollar has increased by VND1,300-1,400, or 5.7-5.8 percent, since the beginning of this year.

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