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Black market bucks dollar prices
Trading of the US dollar is starting to stabilise at around VND16,300 at official exchange spots, but illegal trading is still taking place at smaller shops and keeping open market prices up.
The central bank cracked down on foreign currency exchange late last week in an effort to end US dollar speculation. While agents were allowed to buy foreign currencies from individuals, they were not allowed to sell them back and could only sell to credit institutions.
With commercial banks limiting their sales of the US dollar, to both de-dollarise the economy and deal with the limited flow of foreign currency, individual clients were forced to head to the open market. Commercial banks were rarely selling the dollar to individual clients, limiting their sales to enterprises or importers. The restrictions pushed individuals looking for dollars to the higher black market prices.
"I have to send money to my son in Singapore, but I cannot buy the dollar at the bank, so here I am," said a client at a shop on Ton Duc Thang.
Security forces were deployed to foreign exchange agents last week to end the practice of selling US dollars to individuals, which was driving up the rate.
Agents on Ha Trung, Tran Nhan Tong and Dinh Le streets were buying the US dollar at about VND16,290 yesterday, and selling them back to institutional clients at VND16,293.
The prices matched Vietcombank’s listed rate, and were obviously much lower than on the open market, where the rate peaked between VND18,200-18,500, causing problems in the domestic foreign currency market.
"We buy up the US dollars then give them to commercial banks. We don’t store the dollars," said Nguyen Huu Dang, deputy head of the business department at Ha Noi-based Bao Tin Minh Chau Co.
Security forces weren’t enough to stop all open market trading. Small shops on Giang Vo, Kham Thien, Nguyen Tuan and Ton Duc Thang streets continued to sell the dollar, artificially pushing up the open market price to around VND17,700-18,000.
"The ban on US dollar trading in the open market by the central bank only regulated large authorised agencies. We are trading freely and are obviously not included," said one gold shopkeeper at Giang Vo street.
At some shops and foreign exchange agencies at commercial banks, dealers stopped openly inviting clients to trade the US dollars but continued to trade over the phone. Anyone ordering dollars could get them delivered to their door. The shops encouraged clients to sell a large volume of US dollars by offering higher prices.
With the increased demand, motorbike, electronic and IT shops selling their products in US dollars in the capital yesterday continued to charge clients at the inflated exchange rate of VND18,000.
VNS
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