Experts have urged the central bank to apply the crawling peg - anexchange rate regime that allows depreciation or appreciation to happengradually - to help firms develop appropriate business plans.
At aconference organized by the Academy of Finance's Institute of Economicsand Finance on April 15, the stronger dollar in the world's financialmarket and the recent rise in the VND-USD exchange rate in theunofficial market were discussed.
Although, the State Bank ofVietnam at the end of last month committed to keeping the exchange ratestable, the institute's Deputy Director Nguyen, Duc Do, said at theconference that the market is awaiting an adjustment from the centralbank, given the rising dollar rates against many other major currencies.
Do said the crawling peg regime would be helpfulfor the economy, where the export potential remained large, adding thatthis would help firms, especially export firms in foreseeing forexadjustment and develop appropriate business plans.
He added that if a crawling peg was applied, a cap on exchange rate adjustments for a year would become necessary.
According to Le Quoc Phuong, Deputy Director of the Vietnam Trade andIndustry Information Centre under the Ministry of Industry and Trade, acrawling peg could save the market from possible shocks arising from ahuge exchange rate adjustment at one time. In addition, if the exchangerate was kept stable longer term, this might result in speculation.
Phuong stressed that the exchange rate should be adjusted more regularly with mild adjustments that prevent market shocks.
The Vietnamese dong was devalued by 1 percent from 21,246 VND to21,458 VND against the US dollar in January, the first exchange rateadjustment since 2013.
The central bank pledged that the forex rate would be adjusted by no more than 2 percent this year.-VNA
At aconference organized by the Academy of Finance's Institute of Economicsand Finance on April 15, the stronger dollar in the world's financialmarket and the recent rise in the VND-USD exchange rate in theunofficial market were discussed.
Although, the State Bank ofVietnam at the end of last month committed to keeping the exchange ratestable, the institute's Deputy Director Nguyen, Duc Do, said at theconference that the market is awaiting an adjustment from the centralbank, given the rising dollar rates against many other major currencies.
Do said the crawling peg regime would be helpfulfor the economy, where the export potential remained large, adding thatthis would help firms, especially export firms in foreseeing forexadjustment and develop appropriate business plans.
He added that if a crawling peg was applied, a cap on exchange rate adjustments for a year would become necessary.
According to Le Quoc Phuong, Deputy Director of the Vietnam Trade andIndustry Information Centre under the Ministry of Industry and Trade, acrawling peg could save the market from possible shocks arising from ahuge exchange rate adjustment at one time. In addition, if the exchangerate was kept stable longer term, this might result in speculation.
Phuong stressed that the exchange rate should be adjusted more regularly with mild adjustments that prevent market shocks.
The Vietnamese dong was devalued by 1 percent from 21,246 VND to21,458 VND against the US dollar in January, the first exchange rateadjustment since 2013.
The central bank pledged that the forex rate would be adjusted by no more than 2 percent this year.-VNA
