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Demand from importers, speculation keep dollar strong
Strong demand and speculation are pushing up the value of the dollar on the street.
A large gold shop in Ho Chi Minh City’s District 5 Thursday sold the greenback at VND17,520 compared with VND17,500 on Wednesday.
An analyst at a Hanoi-based bank said the dollar has been strengthening due to strong demand from importers.
Besides, with demand from importers usually peaking at this time of the year, many people have been buying heavily to hoard the greenback.
An analyst, who asked not to be named, said another reason for the growing demand is the “large gap between domestic and international gold prices, which encourages people to buy dollars to smuggle in gold from abroad.”
The price of the precious metal at the Saigon Jewelry Joint Stock Company, the country’s biggest gold trader, was VND16.45 million per tael, or US$816 per troy ounce Thursday. One tael equals 1.2 ounces.
Gold was trading at $713.80 an ounce, up 0.37 percent from New York's notional close on Wednesday, when it fell as low as $707.80, its weakest since October 27, as investors dumped risky assets including gold and stocks, according to Reuters.
The deputy general director of a Vietnamese bank, who too wished to remain anonymous, expects the greenback to strengthen further due to a slowdown in the actual disbursement of foreign investment, sharp decrease in overseas remittances and hoarding.
Vietnam attracted FDI of $59.31 billion in the first 10 months of the year, but a mere $9.1 billion has been brought in.
But analysts predicted the greenback would not strengthen for much longer since Nguyen Van Giau, the central bank governor, said the State Bank of Vietnam can intervene to keep the dollar in check.
SGTT
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