Gold price, exchange rate increase sharply, what does the State Bank say?

Headquarters of the State Bank of Vietnam. (Photo: Thuvienphapluat) — Headquarters of the State Bank of Vietnam

At the press conference for the first quarter of 2024 held this morning, the State Bank said that for the gold market, from the beginning of 2024 until now, the international gold price has fluctuated in an upward trend. The reason is that investors expect the US Federal Reserve (Fed) to cut interest rates soon in 2024, causing the USD index to decrease, demand for gold to increase, central banks of some countries increase gold purchases, concerns about the Russia-Ukraine conflict, tensions in the Middle East, etc.

Domestically, the average price of SJC gold bars fluctuates according to the international gold price.

"The State Bank is implementing measures to support the gold market, selling gold bars to increase supply to the market through bidding," the State Bank said.

In exchange rate management, the State Bank has operated flexibly, contributing to absorbing shocks, combined with issuing VND bills to reduce excess VND liquidity, thereby reducing short-term pressure on exchange rates.

Basically, market liquidity is smooth, legitimate foreign currency needs are fully met; exchange rates fluctuate in accordance with market conditions and trends of international currencies against the USD.

According to the State Bank, this unit will continue to maintain the operating interest rates after four downward adjustments in 2023 in the context of world interest rates remaining high, creating conditions for credit institutions to access capital sources from the State Bank at low costs, continuing to encourage credit institutions to reduce costs to reduce lending interest rates to support the economy.

Currently, new deposit and lending interest rates of commercial banks have decreased compared to the end of 2023. According to the interest rate reports of commercial banks, as of March 31, 2024, the average deposit interest rate of new transactions was at 3.02%/year, down 0.5% compared to the end of 2023 and the average lending interest rate of new transactions was at 6.5%/year, down 0.6%/year.

However, credit growth in early 2024 was quite low compared to recent years, partly due to the fact that demand for credit capital often increases at the end of the year and before Tet; demand and capital absorption capacity of the economy are low due to many businesses shrinking or ceasing operations...

By March, credit had increased positively again after decreasing in the first two months of the year due to seasonal factors. By March 29, economic credit had increased by 1.34% compared to the end of 2023.

"In the coming time, the State Bank will continue to closely follow market developments and the domestic and foreign economic situation to flexibly and synchronously manage monetary policy tools and solutions to control inflation, contributing to stabilizing the macro-economy and stabilizing the money and foreign exchange markets," the State Bank affirmed.

TH (according to VTC News)

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