No dong devaluation

The State Bank of Viet Nam is working to stabilise the foreign exchange rate and the value of the Viet Nam dong.

Responding to concerns expressed by deputies Nguyen Hong Son and Pham Thi Loan, State Bank Governor Nguyen Van Giau attempted to explain the conflicting policy goals the central bank was facing.

While dollar supplies are replenished by export revenues, the country’s trade deficit in the first ten months of this year reached US$8.9 billion, Giau said.

During the global recession, the four major sources of dollars – including exports, foreign direct investment, remittances and tourism – have all shriveled, Giau said, reducing the dollar supply.

"Meanwhile, to reach economic growth targets, the central bank has had to loosen monetary policy, which puts more pressure on the exchange rate," he said.

To deal with the situation, the central bank has already implemented a number of measures to stabilise the forex market, including widening the daily trading band for US dollars and Viet Nam dong, adjusting the daily interbank rate, and cracking down on the foreign exchange black market.

Giau reaffirmed that the dong would not devalued as some have suggested, and he blamed the rumours for the recent overheating of the gold market, a situation that required the central bank to lift its ban on additional gold imports.

"We are working very closely each week with the Ministry of Industry and Trade – some deputy ministers even work together daily – to discuss appropriate solutions," he told deputies. "The gold and forex markets have been gradually stabilised."