2023-05-10 07:30:00
Vietnam’s reserves expected to climb to USD 95 billion, Moody’s says
Credit rating agency Moody’s expects Vietnam’s foreign exchange reserves, excluding gold, to rebound to USD 95 billion by the end of the year as the State Bank of Vietnam (BEV ) replenishes its stock.
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| The US dollar in a Vietnamese bank. |
| Photo : VNA/CVN |
The recent appreciation of the dong, which reflects the improvement in the external position, would give the BEV the necessary space to rebuild its foreign exchange reserves which were spent during the rally of the American dollar last year, said Nishad Majumdar, sovereign analyst in Singapore.
According to the International Monetary Fund (IMF), Vietnam’s foreign exchange reserves reached 88.3 billion USD last January.
A recovery in tourism and a steady flow of foreign direct investment would help boost domestic reserves even as exports weaken, the expert said.
The dong has rallied 6 percent over the past six months, matching the uptrend of Asian currencies as dollar strength weakens, he said.
He expects relevant authorities in Vietnam to prioritize exchange rate stability as a measure to stabilize inflation and provide security for domestic investors.
He believed that a stronger dong would reduce the domestic currency value of the government’s external debt. This, he said, would also likely mitigate the impact of rising import and production input costs on domestic inflation, helping the authorities create the conditions to pursue an accommodative monetary policy.
VNA/CVN
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