Vietnam central bank continues cash withdrawals with $1.82 bln in 3 days

The State Bank of Vietnam (SBV), the country’s central bank, withdrew a total of VND45 trillion ($1.82 billion) over three consecutive days ending Wednesday in an attempt to cool the U.S. dollar rally in the country.

The regulator sold VND15 trillion ($607.3 million) worth of 28-day T-bills via an auction on Wednesday, with the winning rate standing at 1.4% per annum, unchanged from the previous two days, SBV data showed.

The SBV resumed this open market operation on Monday following a four-month hiatus after the greenback appreciated after the Lunar New Year holiday, particularly on the black market.

The banking authority ended this operation on November 8, 2023 after selling a combined VND364.35 trillion ($14.62 billion) over 34 consecutive days, aiming to cut liquidity in the tier-2 (interbank) market to dampen VND devaluation speculation.

USD prices have cooled on the black market over the past three days. On Tuesday and Wednesday, USD prices dropped VND150-180 from an all-time high recorded on Monday of VND25,500-25,700.

Gold shops on Thursday morning offered the greenback at VND25,360-25,440, up VND40 for buying but down VND110 for selling from Wednesday. However, the greenback was still VND780 higher than end-2023, equal to a 3.15% appreciation.

Meanwhile, the dollar is gaining in value at commercial banks. On Thursday, the SBV raised its USD/VND mid-point rate by VND10 to VND23,967 from a day earlier.

Following suit, commercial banks lifted their USD prices by VND20-50, with state-controlled giant Vietcombank offering VND24,500-24,870, up VND50 from Wednesday.