21-Aug-2012 Intellasia | VCSC | 8:42 AM Print This Post
In its updated report, Viet Capital Securities Joint Stock Co (VCSC) forecasts Vietnam’s foreign currency reserve by the end of this year to reach about $21-22 billion.
By the end of 2011, the country’s foreign currency reported by the government was $9 billion. But, till early June 2012, the State Bank of Vietnam (SBV)’s governor, Nguyen Van Binh, revealed that the central bank bought additional $9 billion for reserve, helping maintain the forex rate stable.
In the first three weeks of July, the Forex rate was maintained at a lower level than the ask price of the central bank (20,850 dong/US dollar) and the balance of trade in Jan-July also enjoyed a surplus of nearly $900 million. These factors helped the central bank reserve much more US dollar, VCSC said.
Before this move, Phan Thi Thanh Binh, director of ANZ’s Financial Market Division, said the central bank’s foreign currency purchase blocked the rise of the foreign exchange rate and provided the basis for the government to intervene if the foreign exchange market has fluctuations.
ANZ forecasted by the end of this year, the foreign exchange rate would be approximately 21,500 dong/US dollar, rising about 2 percent this year, the bank’s report said.
In the other direction, Pham Hong Hai, deputy general director of HSBC, at the CEO Summit 2012 said in the context of weak domestic demand as at present, the Forex rate by end of the year would be only about 21,300 dong to 21,400 dong/US dollar.
Relating to the price issue, VCSC’s report also said that inflation in 2012 will hardly be higher than 6 percent when this index rose only 2.22 percent in the first seven months of this year.
“Improved inflation will encourage the government and the central bank to continue easing policy to stimulate growth” the report said.
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