State Bank of Vietnam Expands Foreign Exchange Operations, Injects Nearly VND 50 Trillion into Banks
The State Bank of Vietnam provided nearly VND 50 trillion to the banking system through a six-month foreign exchange swap on November 9 and raised its spot USD purchase price from November 11. Medium- and long-term interbank swap rates fell after the measures were announced, while the volume of spot purchases remains dependent on actual trading conditions.
Nguyễn Linh Phương, deputy director of the Monetary Policy Department at the State Bank of Vietnam, said the central bank provided nearly VND 50 trillion to the banking system through a foreign exchange swap on November 9. It also added a channel for spot USD purchases to support bank liquidity during year-end settlement and the 2027 Lunar New Year holiday.
The State Bank of Vietnam is conducting a six-month foreign exchange swap to provide VND liquidity to the banking system.（VietVance）
The swap plan announced by the State Bank of Vietnam on November 6 has a maximum size of USD 2 billion, a term of 182 days and a settlement date of November 9. Under the plan, the central bank buys USD from credit institutions at VND 24,399 per USD and commits to selling back the corresponding foreign currency after 182 days at VND 24,704 per USD. Following the announcement, the six-month foreign exchange swap rate in the interbank market fell to near the central bank’s quoted level, while swap rates for terms of three months or longer also began to decline.
VPBank Deputy CEO Vũ Minh Trường said the six-month term means the funding will cover year-end settlement in 2026 and the 2027 Lunar New Year holiday. He said the 2.25% swap cost is lower than banks’ current actual funding costs in international markets. He added that the measure would help VPBank lower lending rates.
From November 11, the State Bank of Vietnam raised its spot USD purchase price to VND 25,500 per USD, up VND 1,130, or 4.64%, from November 10. Purchases are scheduled for Mondays and Wednesdays each week and are open to credit institutions and foreign bank branches with net long foreign exchange positions and a need to sell foreign currency. The maximum amount each institution may sell is the amount needed to bring its foreign exchange position back into balance.
On November 11, commercial banks’ USD transfer buying and selling rates rose to VND 25,440 and VND 25,820 per USD, respectively, both up VND 30 from the previous day. At 11 a.m., the interbank exchange rate was around VND 25,634 per USD, an intraday quote. The State Bank of Vietnam’s spot purchase price remained about VND 134 below that quote, so whether it can buy foreign currency, and how much VND it injects as a result, still depends on actual trading conditions.
Source: VietVance
