Worries loom as dollar weakens.

(From The Saigon Times Daily)

Byline: Duc Luan

(SGT-HCMC) The central bank, commercial banks and even foreign trade entities are weighing new foreign currency policies to minimize risks in case the greenback plunges further against other currencies.

A central bank official said new measures may come forth soon to protect local players from risks as the U.S. dollar has nosedived against the euro and other currencies. The dollar was exchanged for 0.9895 euro and 116.13 Japanese yen yesterday compared to 1.006 euro and 116.62 yen two days earlier.

Under prevailing regulations, banks are required to maintain their forex positions at 15% of their equities for the greenback, and 30% for the basket of other currencies. "The central bank may consider to drop the forex position rule for the U.S. dollar, and retain the latter for the currency basket, but this position too will be readjusted to make it attuned to the current situation," said Vu Thi Phuong Lien, acting chief of the central bank's forex management department

Since the euro was officially introduced, replacing the 12 currencies in the so-called euro zone, the State Bank of Vietnam has studied a mechanism governing the foreign exchange and interest rates for the euro, but has yet to introduce the new policies.

"What we are weighing is when to introduce this mechanism," Lien said, adding the US dollar depreciation against the euro began just a short time ago, and there was no evidence that the European economy had strengthened.