As a result of Israel's strike on mainland Iran, the value of the Vietnamese dong against the US dollar has fallen to an all-time low. The State Bank of Vietnam (SBV) has expressed its readiness to intervene in the foreign exchange market immediately.
On the 19th (local time), according to Bloomberg and other sources, Dao Minh Tu, SBV Deputy Governor, emphasized at an event, "If the exchange rate negatively impacts the economy, we are prepared to intervene starting today." Deputy Governor Tu stated that Vietnam's foreign exchange reserves are sufficient and that the exchange rate will be managed flexibly.
The value of the Vietnamese dong, which was around 23,000 VND per dollar at the beginning of last year, fell during the trading session to an all-time low of 25,463 VND per dollar.
According to Bloomberg, the daily exchange rate of dong/dollar rose 0.7% over the past two weeks, marking the highest increase since 2015.
Along with expectations of the US Federal Reserve (Fed) delaying interest rate cuts, news of Israel's airstrike on mainland Iran caused emerging market currencies to weaken simultaneously on the day.
Deputy Governor Tu said that although the dong has depreciated 4.9% against the dollar since the beginning of this year, moving in line with other Southeast Asian currencies, inflation remains under control.
He also explained that since early last month, the SBV has taken several measures to ease depreciation pressure on the dong, including issuing short-term government bonds to absorb dong from the market and selling dollars to commercial banks.
Meanwhile, the SBV announced that it will conduct a gold sale through an auction on the 22nd to stabilize the recently soaring gold prices.
This will be the first gold auction by the SBV in 10 years and 4 months since December 2013.
In the Vietnamese financial market, the preference for safe assets has recently increased, causing gold prices to surge to a record high of approximately $2,744 per troy ounce on the day.
Fifteen entities, including commercial banks and gold trading companies, have met the qualifications to participate in the gold auction.
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