Vietnam's forex policy to support exports

Vietnam will maintain a flexible monetary policy and tailor its forex policy to support exports, while following market signals to determine foreign exchange rates, central bank governor Nguyen Van Giau said on Wednesday.

"We have identified exports as a driver and our policy has been to support exports," Giau said, citing the weakening of the Vietnamese dong currency since 2007.

Vietnam would "build up our policy on foreign exchange rates based on the market demand and supply", Giau told the parliament in a televised broadcast.

The comments came a week after Giau's State Bank of Vietnam cut the country's three most important interest rates in a bid to help the economy at a time of uncertainty about the economic health of some of Vietnam's main trading partners.

Vietnam last week also widened the band in which its currency, the dong , trades against the dollar, effectively allowing it to depreciate to boost exports and propel growth. The government has forecast economic growth of 6.7 percent this year and 6.5 percent next year.

So far, Vietnam's banking system remained safe, with bad debt worth 35 trillion dong at the end of September accounting only for 2.92 percent of total loans, while banks have so far put aside 22 trillion dong for risk prevention funds.