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VND/USD exchange rate to fluctuate no more than 2% in 2015

VietNamNet Bridge – The State Bank of Vietnam (SBV) will continue to pursue its current dong/dollar exchange rate stabilization policy in 2015. Vietnamese dong depreciation, if it occurs, will not be higher than two percent.

Thoi Bao Kinh Te Vietnam has quoted sources that say the stabilization will still be the target of the central bank’s foreign exchange policy in 2015.

However, though confirming the stabilization policy, the State Bank has foreseen a lot of changes in the foreign currency supply and demand in the year.

International experts all believe that the crude oil prices would continue to fall in 2015. The price has dropped from over $100 per barrel to the $60 per barrel threshold, while it is still unclear what would be the deepest low.

This means that the foreign currencies Vietnam can expect from the oil exports would decrease sharply, especially if the oil price is halved.

However, the central bank still is optimistic about the foreign currency sources, believing that the decrease in the income from oil exports would be offset by revenue from the export of other products.

A high ranking official of the Ministry of Industry and Trade said that with a series of trade agreements signed with foreign trade partners, Vietnam’s products would find it easier to penetrate the markets.

Vietnam puts high hope on the Russian market, which, bearing sanctions imposed by western countries, has high demands for many different products. This means that Vietnam has every reason to believe that it can boost sales to Russia in the time to come.

Also, the predicted foreign direct investment (FDI) and foreign portfolio investment (FPI) increases may lead to an abundant foreign currency supply, which would help balance supply and demand and help the central bank in its foreign exchange policy.

The bank has projected a huge surplus of up to $8 billion in the general balance in 2015.

Analysts say the $8 billion target is “within reach”. As for 2014, the surplus had reached over $10 billion by the end of November.

The analysts also said that with the current foreign currency reserves and the high surplus in the general balance, keeping dong depreciation at no more than 2 percent is “feasible”.

Nguyen Van Binh, Governor of the State Bank, said in the past: “As long as I stay as the Governor of the State Bank, the value of the Vietnam dong will be guaranteed.”

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