An ‘overwhelming demand for foreign currency’ in Vietnam saw the State Bank of Vietnam sell US dollars to the tune of US$400 million yesterday, according to Asia Commercial Bank data. The bank estimates that since the end of April about US$950 million worth of foreign reserves have been sold.
Vietnam is cagey about its foreign currency reserves and does not regularly publish forex data. It does, however, periodically communicate what it has on hand with the International Monetary Fund. The last report from the IMF, in September of 2023, recorded forex reserves of US$87.6 billion.
At the beginning of April, the Deputy Governor of the State Bank of Vietnam said the bank had about US$100 billion in its reserves. However, research from WiGroup last week estimated Vietnam’s reserves to be only about US$90 billion. That being the case, with the IMF recommending enough foreign currency on hand to cover three months worth of imports, and imports reaching just shy of US$30 billion in April, these reserves are dangerously low.
Of note, the State Bank has had to intervene in the local currency market a number of times to keep the dong from devaluing over the last two years. For more information see: The Dong’s Wild Ride: Unpacked