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Dollar price down, supply-demand in balance again
The VND/US$ exchange rate in the interbank market has been decreasing in the last few days, while the rate in the black market also decreased on April 2.
Dollar weakening
The VND/US$ exchange rate in the black market in Hanoi on April 2 afternoon unexpectedly dropped to VND17,800-17,830/US$1 (purchase and sale), down by VND10/US$1 over the morning, and VND20/US$1 over the previous day.
As such, the VND/US$ exchange rate decreased dramatically after six days of staying at VND17,850/US$1 (sale) and VND17,810-17,830 (purchase).
The dollar price decrease has surprised those who thought the dollar would keep rising due to the short supply and the government’s policy on stimulating exports. They expected the appreciation of the dollar also because of the move by the State Bank of Vietnam to widen the trading band from 3% to 5% on March 24, which was considered a move to pave the way for the VND’s devaluation.
In HCM City, dollar transactions on the black market have become weaker in comparison with the first day after the trading band was widened to 5%.
In the official market, the interbank exchange rate announced by the State Bank of Vietnam for April 2 was VND16,943/US$1, the same as April 1. The official exchange rate has been decreasing since March 24, from VND16,980/US$1 to VND16,970/US$1 on March 27 and VND16,954/US$1 on March 31.
As such, the official exchange rate has stayed the same for the last two days, at VND16,943/US$1, but people cannot predict what the exchange rate will do in the coming days.
While the official interbank exchange rate has been decreasing in the last few days, commercial banks have not made considerable adjustments.
Vietcombank on April 2 quoted the exchange rate at VND17,710/US$1 (purchase, cash), VND17,720/US$1 (purchase price for transferred money) and VND17,790/US$1 (sale).
As such, the sale prices of the bank have lowered slightly from VND17,824 on March 27 to VND17,802 on March 31, and to VND17,790 on April 1 and 2.
Meanwhile, the purchase price remains at VND17,710/US$1.
Supply and demand return to normal
One of the reasons the greenback is weaker these days, according to Tran Xuan Huy, General Director of Sacombank, is that supply and demand is balanced again since the central bank’s move to widen the trading band.
Meanwhile, exporters who have dollars are considering selling dollars as they need capital to serve their business.
Deputy General Director of ABBank Pham Quoc Thanh said that foreign currency supply and demand have become more stable. More exporters are selling foreign currencies to banks, while importers can buy foreign currencies from banks at the exchange rates officially quoted by the banks.
Nevertheless, some analysts have warned that the dollar price may increase soon. The deputy general director of a gold trading company in HCM City said that as the domestic prices are higher than the world’s prices, it is likely gold will be illegally imported into Vietnam. As a result, dealers will collect dollars on the market to purchase gold, which may result in higher dollar prices.
The dollar price fluctuations on the black market will, to some extent, have impacts on the exchange rates of commercial banks, as the dollars to go into banks will decrease. To date, the State Bank of Vietnam has not granted quotas to import gold again.
VietNamNet, LD
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