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Wiser investors would make VND deposits: experts
On October 28, the VND/US dollar exchange rate stayed at VND16,810-16,848 to US$1 (purchase and sale prices). As expected, the exchange rate has not exceeded the VND17,000/US$1 threshold. Experts said that instead of taking risks with the greenback, wise investors should make VND deposits.
The foreign currency market has become stabilized right after two of Vietnam’s biggest banks; the Bank for Investment and Development of Vietnam (BIDV) and Vietcombank, announced they have enough money to satisfy the dollar demand from businesses. The two banks said that they have sold hundreds of millions of dollars every day in the last few weeks.
Tran Bac Ha, Chairman of BIDV, said that on October 23, when the greenback price soared, BIDV sold US $50 million, a figure that was much higher than ordinary days, at prices lower than the market prices to calm the public down. Meanwhile, Vietcombank said that it sold US $300 million in one day.
Some sources said that commercial banks now have US dollars in excess after they have withdrawn deposited dollars from foreign banks for fear of the impact of the financial crisis. Therefore, some small commercial banks now deposit their US dollars at Vietcombank.
Nguyen Manh, Director of the Capital Business Division under BIDV, said that since July 2008, the volumes of foreign currencies BIDV have mobilized have always been higher than the volumes it sold.
There doesn’t seem to be any factor that supports the exchange rate increase. According to the General Statistics Office, the trade deficit in October 2008 was just US $700 million, while the export turnover was US $5.1 billion for the month. In the first 10 months of the year, Vietnam received US $53.8 billion in foreign currencies.
Injecting money in VND the best way
In the latest report, the State Bank of Vietnam said that the monetary market has been stable. The exchange rate in the interbank market on October 27 was VND16,515 to US$1.
Ha from BIDV said that it would very dangerous to go in on investments with US capital. Ha said that the best ways to invest for now are making over-1-year term VND deposits. Making long term deposits is considered the wise move as banks plan to slash deposit interest rates as their usable capital has become profuse.
Ha said BIDV is considering slashing their interest rate to 15%, while the bank has not intended to adjust the US interest rate.
Vietnamnet
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