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Dollar drops, but import prices unchanged
The dollar price has decreased since late 2009, but consumers have not benefited, because prices of imported products have not decreased accordingly.
The State Bank of Vietnam (SBV) adjusted the dong/dollar official exchange rate twice in late 2009 to stabilize the foreign currency market. The black market dollar has also been decreasing, closing in on the exchange rate of commercial banks.
On April 11, the dollar sold in gold shops at 19,130 dong per dollar, while commercial banks quoted the dollar at 19,100 dong per dollar, narrowing the gap between the black and official markets to 30 dong per dollar versus 1000 dong per dollar previously.
No suppliers have offered to cut prices in light of dollar price decreases, even though they used the rate fluctuation in the past to raise prices of import products (Food, cosmetics) by 3-5 percent.
Khang, a big cosmetics importer in HCM City, just imported a consignment of products on April 8. He does not intend to lower prices.
“The dollar price has just decreased significantly over the last two weeks. Meanwhile, there is no sign showing that the dollar price will keep decreasing. Therefore, I will not cut prices because I suspect the dollar price may rise again,” he explained.
Meanwhile, Nguyen Phuong Thao, Director of Maximark, suspects that suppliers will ease prices only when the low dong/dollar exchange rate is stable for a long time.
Thao explained that the black market exchange rate has come closer to the bank-to-business market rate, because of the SBV adjustment to the exchange rate. Traders also must consider the black market exchange rate, not the bank-to-business market rate, when defining prices.
Regarding the black market dollar price, Thao commented that the dollar is selling at over 19,000 dong, higher than last year’s price at 18,200-18,400 dong. “The dollar price has been going up year on year for the last many years,” Thao concluded.
According to Saigon Tiep Thi newspaper, beauty salons that quote services and products in dollars, the dong/dollar exchange rate applied there is 19,000 dong per dollar. Nhung, a beautician, told reporters that the conversion rate has been applied since October 2009, when the gap between official market dollar rate and black market rate was 1000 dong per dollar. However, the beauty salon does not intend to change its exchange rate.
Despite dollar price decreases, home appliances and computer prices remain unchanged. While importers benefit from the dollar price decreases, they do not intend to slash prices.
“The prices will only go down if the dong/dollar exchange rate falls sharply by 5-7 percent,” T, a computer retailer calculated. “We cannot talk about a price decrease now, when the dollar price has dropped by less than one percent.”
T. noted that only if products sell slowly would he try to attract customers by offering price reductions.
vietnamnet, Saigon tiep thi
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