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Dollar on black market marching towards VND18,000/US$1.00
People have been rushing to foreign currency exchange shops to buy dollars these days, pushing the dollar price up. Meanwhile, the interbank exchange rate announced by the State Bank of Vietnam remains stable.
The dollar prices quoted by gold and foreign currency exchange shops in the Ben Thanh market area in district 1, HCM City changed many times during the afternoon of February 24. The dollar price surged by VND20/US$1 every 30 minutes.
The owner of a gold shop at Tan Dinh market said that the number of clients increased by 20% yesterday in comparison with February 22 and 23. “Each of my clients purchased several thousand dollars to hoard, as they fear the greenback price would hit VND18,000/US$1.00,” she said.
Le Hoai Nam, Deputy Finance Director of Minh Vu Informatics Company in HCM City, said that it is now very difficult to purchase dollars from banks, and therefore, a lot of businesses have to purchase dollars on the black market.
“We did not purchase dollars in early February 2009, when the price was at VND17,500/US$1.00 because we hoped the prices would go down. However, as the dollar price has nearly hit the VND18,000/US$1.00 threshold, we have to purchase dollars now,” he said.
Meanwhile, economists have advised individual clients not to purchase dollars at this moment if they really do not have a demand for dollars.
Dinh Gia Hung, a well-known money trader in HCM City, said that people should not follow the surfing investors (who purchase dollars when the prices go up and sell dollars a little later when the prices are at high levels), as the exchange rate proves to fluctuate.
Director of a finance company said that people rush to buy dollars these days because they fear the prices will go up further, while the demand for dollars to make payments for contracts is not big.
According to the HCM City Branch of the State Bank of Vietnam, the US$ interest rate deposit interest rates offered by commercial banks in the city have been on the decrease, now remaining at below 3% per annum. Nguyen Thi Ngoc Van, Deputy General Director of East Asia Bank, believes that the interest rates will go down further as many banks now have abundant dollars.
It is clear that it is more profitable to keep VND than dollars, as the monetary policies for the last many years, have been designed in that way. Economists believe that it would be more profitable to keep dollars than VND only when the dollar prices rises to over VND18,500/US$1.00, something that is not likely to occur in the upcoming months.
Meanwhile, Governor of the State Bank of Vietnam Nguyen Van Giau, affirmed that currently, the Government of Vietnam does not intend to adjust the VND/US$ exchange rate, and that the information about the VND devaluation and the dollar shortage proves to be unreliable.
Giau said that the central bank is absolutely capable of controlling the market and ensuring the dollar supply and demand.
General Director of Vietcombank Nguyen Phuoc Thanh also said that Vietcombank can meet the demand for dollars from businesses and individuals.
The exchange rate on the black market yesterday climbed to VND17,750-17,830/US$1.00 (purchase and sale). Meanwhile, the interbank exchange rate was VND16,971/US$1.00, down by VND1/US$1.00 over February 23. Vietcombank’s quoted purchase and sale prices were the same at VND17,480/US$1.00.
Andy Ho, Director of VinaCapital, believes that though many financal institutions have suggested devaluating the VND, Vietnam still needs to think carefully about that.
In fact, the suggestions by financial institutions noted that Vietnam should devaluate the VND step-by-step, not sharply, and that the move should be carried out together with other measures to prevent risks.
VietNamNet, TP, VNE
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