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Importers complain it’s difficult to purchase foreign currencies
Though the dollar black market has been cooled down and the State Bank of Vietnam has applied a lot of measures to put the foreign currency trading activities in order, import companies still complain that they find it very hard to purchase dollars.
Nguyen Thi Huyen Nga from the Thai Viet Company Ltd. said that though the State Bank commits to stabilize the exchange rate, most of commercial banks refuse to sell dollars to businesses, so that the businesses can make payment for imports.
A paradox exists where businesses have to purchase dollars on the black market and then sell to commercial banks. After that, businesses have to purchase their own dollars from the banks. As the result, businesses have to spend a lot of time and expenses to get their dollars, as there has been the big gap existing between the dollar price in the black market and the prices quoted by commercial banks.
The dollar price on the black market on March 23, for example, was VND 17,650/US $1.00. Meanwhile, the exchange rate quoted by commercial banks was VND 17,849/US $1.00 (purchase and sale) which hit the ceiling level allowed by the State Bank of Vietnam. This has put big difficulties for importers since this makes businesses’ expenses higher.
Nguyen Thanh Nhon, a representative from the HCM City Young Entrepreneurs Association, related that in April 2008 when the exchange rate fluctuated, most of import-export companies could not purchase dollars from banks. If they could purchase dollars, they had to pay higher than the quoted prices.
“At that time, commercial banks quoted the price at VND 16,900/US $1.00, but businesses had to pay VND 19,500/US $1.00 to get dollars,” Nhon said, adding that the thing is repeating now, making importers and exporters suffer as the input expenses increase, while the sale prices and market shares are decreasing.
The Deputy General Director of a joint stock bank said that in the last while, when the dollar price tended to increase in the black market, people tend to hold more dollars. Exporters, who have dollars from their exports, do not sell dollars right when they get income as they hope the dollar prices would increase further. As commercial banks cannot purchase dollars from exporters, the dollar supply has become short to meet the demand.
Some experts believe that in order to overcome the current difficulties of the crisis, Vietnam should devaluate the VND to boost exports.
However, Associate Professor Dr. Tran Hoang Ngan, Assistant Principal of the HCM City Economics University who is also the member of the National Advisory Council for Monetary Policies, said that though the local currency devaluation will encourage export, it will also bring side effects. He has also warned that in the global economic recession, it is not sure that exports will increase with devaluated currency.
The Governor of the State Bank of Vietnam, Nguyen Van Giau, said that the central bank will follow a flexible foreign currency management policy which will be adjusted in accordance with the market performance.
Giau said that in the last while, several countries in the world had problems in their trade balance and they had to call for the support from the International Monetary Fund (IMF). Meanwhile, Vietnam’s payment balance remains stable and the foreign currency supply is not tight. However, Giau said that businesses nowadays tend to try to keep foreign currencies, hoping that the exchange rate will keep rising.
Giau forecasts that the inflation rate would be below 15% this year, or even at a one digit level.
VietNamNet, DTCK
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