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The State Bank of Vietnam (SBV) released a statement on February 22 revealing it is ready and willing if intervention is necessary to stabilise the foreign exchange market.

The central bankCentral bank acts to quash rumours made clear its stance refuting rumours circulation on February 21 that Tran Bac Ha, President of the Board of Directors of the Bank for Investment and Development of Vietnam (BIDV) had been arrested.

The monetary market was immediately plunged into chaos. The stock market’s VN-Index lost 18 points – the sharpest fall over recent months.

The exchange rate also skyrocketed to surpass the VND21,000/US dollar mark.

After the rumours were denied, shares rallied on February 22, with VN-Index increasing 0.96 points. Commercial banks lowered their exchange rates to below the VND21,000/US dollar mark.

Le Minh Hung, SBV Deputy Governor, said foreign currency reserve in the banking system is in surplus and the bank is ready to intervene in the forex market if required.

An SBV official earlier also confirmed that it is not the right time to adjust the exchange rate.

In its statement, the central bank asserted that it will continue to keep the exchange rate in check taking into account macroeconomic changes and the market law of supply and demand.

It is working with the Ministry of Public Security to identify those responsible for spreading the rumours and deal with black market speculation.

The bank also cautioned people against acting on misleading information to avoid unwanted losses.

(VOV)

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