The State Bank of Vietnam (SBV) is committed to a consistent butflexible policy on foreign exchange management this year with a view tomaintaining currency market stability and increases foreign currencyreserves.

The central bank considered 2013 a successfulyear, as the two major goals of keeping exchange rates under control andincreasing the foreign currency reserves had been achieved.

SBVDeputy Governor Nguyen Dong Tien says the bank recognises theimportance of leaving enough management leeway to respond to anyunforeseen market developments. Last year, this flexibility helpedauthorities quash damaging rumours and cool off the foreign currencymarket before pressures escaped control.

“Consistency reinforces market trust,” Tien says. “Fluctuations are only short term.”

He attributes the bank’s 2013 successes to its management of foreign currencies and gold, and the anti-dollarisation push.

TheSBV Deputy Governor affirmed the central bank will continue its policyflexibility into 2014, hopefully reducing the economy’s dependence ondollars and gold and supporting export business growth.

Economicexperts concur on the need for flexibility but warn that anyadjustments must be made in a cautious manner to avoid big shocks to theeconomy.

SBV Foreign Currency Management Department HeadNguyen Quang Huy said the central bank faces three major currency marketmanagement challenges in 2014: an imbalance between demand and supply,market manipulation, and unpredictable investor psychology.

Therefore, many factors should be taken into account before any decision is made relating to foreign exchange rate, he said.-VNA