Vietnam's central bank said on Wednesday it
will require lenders to reduce the amount of foreign currency they hold at the
end of each day beginning in early May, in what bankers said was another
attempt to prevent dollar hoarding and control the foreign exchange market.
Starting
on May 2, banks will have to keep their long foreign exchange position at no
more than 20 per cent of their equity by the end of each working day, compared
with 30 per cent now, the State Bank of Vietnam said in a statement.
The 20 per
cent ratio will also be applied to the short position, the statement said.
Branches
of foreign banks with equity below $25 million will be required to keep their
foreign exchange positions at no more than $5 million on a daily basis, the
central bank said.
The
Vietnamese dong has been stable so far this year, with the mid-point rate set
daily by the central bank at 20,828 dong per dollar, unchanged since late
December, following a lower-than-expected trade deficit in 2011 of $9.5
billion.
The
central bank's move is another step to gain control of the foreign exchange
market and reduce risks, said a currency trader at a Hanoi-based bank.
"The
lenders will have less room to hold and speculate the dollars," he said.
The
move will prompt lenders to sell dollars to the central bank, said another
banker in Hanoi.
The
dong will depreciate by no more than 2-3 per cent against the dollar this year,
central bank governor Nguyen Van Binh has said, after losing 5.2 per cent in
2011.
The
dong's depreciation has slowed this year as businesses reduce imports due to
unfavourable economic conditions and after the central bank stepped up measures
to control the gold market, which ultimately reduces the demand for dollars,
analysts said.
Reuters
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