A stronger US dollar and already very loose monetary policy in Vietnam is leaving the State Bank of Vietnam (SBV) with few options left to manage the local currency and it may need to sell dollars under futures contracts, VietnamNet has said.
Of note:
- The dong is on a floating peg set by the SBV, US$ futures contracts paired to the Vietnamese dong would be at risk of manipulations by the SBV; and
- Inflation in the US is largely a result of disruptions to the energy markers caused by higher fuel prices as a result of the war in Ukraine–the problem is long term but currency futures are only relatively short term usually.