The State Bank of Vietnam (SBV), the country's central bank, has purchased a total of US$4.9 billion since the beginning of 2023 to boost foreign exchange reserves, said Minister of Planning and Investment Nguyen Chi Dung at a monthly government press conference on May 5.

Minister of Planning and Investment Nguyen Chi Dung at the press conference. Source: VGP

Dung said the State Bank of Vietnam has flexibly managed the exchange rate and maintained smooth market liquidity.

The bank has continued to buy foreign currencies from lenders, increasing the country's foreign exchange reserves. By the end of April, the SBV had purchased about $4.9 billion, almost $1 billion higher than the amount reported at the end of the first quarter.

According to a report by BIDV Securities Company, the SBV has been buying foreign currencies since January, with $2.78 billion purchased in the first month alone, bringing the foreign exchange reserves to around $91.8 billion.

Experts from VNDirect Securities Company predicted that Vietnam's foreign exchange reserves could reach $102 billion by the end of this year.

On the economic situation, Dung noted the macroeconomic fundamentals remained stable during the four months.

The consumer price index (CPI) increased by 3.84% year-on-year, down from 4.18% in the first quarter.

Meanwhile, core inflation in April increased by 4.56% compared to the same period in 2022, with an average increase of 4.9% over the past four months, which is higher than the average CPI.

Dung credited positive efforts to address challenges in various sectors, such as the property market and corporate bonds, for early signs of progress that can create momentum for recovery in the future.

Corporate bond issuance in the first four months of the year dropped more than 67% from the same period last year, totaling VND25.7 trillion (US$1.1 billion).

Enterprises have repurchased VND24.3 trillion (US$1.03 billion) of bonds before maturity, and some have negotiated with investors to either extend the maturity or transfer the debt to another asset.

Despite these positive trends, Minister Dung acknowledged that production and business still face many obstacles due to external factors that pressure macroeconomic management.

The latest statistics show that Vietnam's Jannuary-April imports and exports decreased by more than 15% compared to the same period last year, amounting to more than $102 billion. Despite this, Vietnam recorded a trade surplus of $6.35 billion in the same period, mainly due to a trade surplus of over $14 billion in the foreign investment sector, while the domestic economy had a trade deficit of over $8 billion.

The Index of Industrial Production (IIP) for April is expected to rise by 3.6 percent from the previous month and by 0.5 percent from the same period last year, but overall the IIP for the first four months of the year fell by 1.8 percent.

"The economy still faces many risks, including unpredictable fluctuations due to the slow recovery of major trading partners, persistent global inflationary pressures, and the tightening trend of monetary policies in various countries to control inflation," Dung said.

Despite the challenges facing the Vietnamese economy, Dung expected opportunities to boost growth by increasing public investment, consumption, and tourism and taking advantage of the trend of shifting foreign investment flows.

To achieve the targeted 6.5% growth rate for this year, he recommends that ministries and sectors closely monitor and analyze global trends that could affect Vietnam and take appropriate measures in response.

Dung recommended that local ministries and agencies simplify business conditions and improve the investment environment without creating unnecessary costs, procedures, or time for businesses and individuals.