The Director of the Monetary Policy Department at the State Bank of Vietnam, Pham Chi Quang, has denied rumours that the State Bank is considering changing tact in terms of monetary policy.
With Forex reserves being spent hand over fist trying to keep the dong from devaluing, there has been speculation that greater intervention may be needed, specifically an interest rate hike. On Thursday Bloomberg reported that Malayan Banking Berhad was expecting an interest rate hike possibly as early as this week.
This denial from Pham, however, would suggest the bank intends to burn through its US dollar reserves a while longer. According to Asian Commercial Bank–ACB–data, it has already spent almost US$3.5 billion since April 19, of the US$100 billion it had squirrelled away. Three months worth of imports, which the International Monetary Fund recommends countries have in foreign currency reserves, based on customs data from the first four months of this year, is about US$86.2 billion. Ergo, the bank has about US$10 billion worth of reserves left before it hits the danger zone.
See also: The Dong’s Wild Ride: Unpacked