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Dollar’s street value drops slightly
The US dollar fell slightly to VND18,010 on the street yesterday after rallying for a week.
The dollar was down VND20-30 against Wednesday's rate to VND18,010-18,030 on Ha Noi's Ha Trung and Tran Nhan Tong streets while it was reportedly selling for VND18,020-18,040 at about midday in HCM City.
It had cost as much as VND18,060 on Monday.
The respite seems to have ended - at least for now - a three-week tug-of-war between the official exchange rate and currency traders.
Investors switching from the dollar to dong to capitalise on the rallying stock market and earning more from higher dong bank deposits was assumed the reason for the change.
"It's really a good time to surf the stock market," explained VnDirect Securities Investor Nguyen Duc Quyen.
"I have sold my dollars. Speculating the dollar will not reap as much short-term profit as shares."
Bao Tin Minh Chau Jewellery Co Business Manager Nguyen Huu Dang said investors were deserting both the gold and currency markets for equities.
"I don't know why but people are eager to shift to shares," he said.
Banks are raising their dong deposit rates to attract mid-to-long term capital in anticipation of the Government's second round of subsidised loans.
Yearly rates for six-to-24 month deposits range from 7.3-8.8 per cent, up about 0.5-0.8 per cent.
The rate for the US dollar is about 2-2.5 per cent.
"I don't have many dollars because I didn't buy when the dollar surged," said.
Do Thi Thuy, a customer at the Quoc Trinh gold and currency shop on Ha Trung Street.
"I just want to sell the dollar for dong to deposit in the Sacombank which is offering interest of up to 8.7 per cent."
Interbank rate
The State Bank of Viet Nam set an interbank rate of VND16,938 for the dollar yesterday from VND16,939 on Wednesday and VND16,980 on March 24.
Commercial banks posted exchange rates much closer to the street price and the currency traded at VND17,785 yesterday - the upper limit of the daily trading band.
But many listed the same price for buying, selling and transfer of the dollar - indicating an imbalance between supply and demand.
Several reported they had just sufficient dollar deposits to meet the demand for lending.
But they did not have dollars to buy or sell.
"We are definitely falling short of US dollars to meet the demands of customers who want to buy," Vietcombank Treasury Department Director Pham Thanh Ha said.
"No one wants to sell banks their dollars," he said.
"Who can name any bank that has abundant US dollars to sell? asked Asia Commercial Bank Deputy General Director Nguyen Thanh Toai.
But when Viet Nam News put that question to a senior State Bank of Viet Nam official, who asked to remain anonymous, he replied: "No! Supply and demand of the dollar is normal.
The central bank has been supporting the banks to ensure liquidity for the essential demands of the economy.
"Banks should know how to balance supply and demand to trade the dollar normally."
Gold prices fall
Domestic gold prices fell by VND10,000-20,000 per tael yesterday (a tael equals 1.2 troy ounce) against Wednesday to about VND19.57 million (US$1,105).
Trading was quite slow.
Gold traded at the Sai Gon Jewellery Holding Co at VND19.57-19.63 million and at VND19.59-19.52 million per tael for PNJ-DAB gold leaf at the Phu Nhuan Jewellery Co.
Gold orders were matched at about VND19.065 million per tael with modest volumes on the gold exchanges.
Global gold was little changed at about $890 per ounce yesterday.
Spot gold stood at $891.20 per ounce at 0625 GMT, up 0.1 per cent from New York's notional close of $890.60.
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