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Rising dollar price raises concerns over supply sources
The recent dollar tension has raised the local banks and enterprises’ concerns over supply sources though it seems there is no dollar shortage in the whole banking system.
Vietcombank is under pressure to meet the local firms’ demand for the greenback, Sai Gon Tiep Thi (Saigon Marketing) newspaper quoted Nguyen Phuoc Thanh, Vietcombank’s general director, as saying.
The bank could try to manage dollar supply for the lending to small and medium-sized businesses, but the lender had to report to the State Bank of Vietnam to seek support on dollar supply for big loans to importers of necessities like petrol and oil, Thanh added.
Thanh cited out that earlier, businesses have sold hundreds of million dollars to the bank and Vietcombank has sold them to the SBV.
Petrolimex’s demand for dollars are estimated at $5.5 - 6 billion each year, Vuong Thai Dung, the company’s Deputy General Director, told the newspaper, adding that if dollar prices continue to accelerate, his business activities will be hampered.
The bank system now has $250 million to $300 million surplus, an official from the central bank affirmed, adding that the dollar fever mainly stems from the gold price skyrocket and dollar hoarding by the people and local enterprises.
SBV Governor Nguyen Van Giau has recently confirmed that “currently, the SBV has no plan to adjust the dong/dollar exchange rates”.
But it is likely to provide a certain amount of the US dollars to commercial banks to meet the demand for imports of essential goods, according to the local newswire Vnexpress.
The SBV did not specify the exact date and how much that it would be pumping money, but it confirmed it would soon deploy to meet the demand of essential imports.
Vo Tri Thanh, Deputy Director, Central Institute for Economic Management told Sai Gon Tiep Thi that the public’s interest in holding the greenbacks and gold is as strong as the central bank, citing that foreign currency-denominated deposits make up of 20-25 percent of total deposits, or around $20-$25 billion.
Thanh pressed that “picking up the public’s belief in the domestic currency’s stability will help to unravel the knot of dollar exchange rates’ pressures”.
The World Bank on Tuesday warned that an unusually large amount of money held outside Vietnam's official foreign exchange reserves is continuing to pressure the dong.
The International Monetary Fund last month reported that Vietnam’s foreign currency reserves had fallen in the first half of the year and equaled only seven weeks’ worth of imports.
In response, the central bank confirmed that reserves were sufficient for the country’s macroeconomic stability, adding the balance of payments (BoP) reached a surplus of $3.4 billion in the first half of this year.
But the Ministry of Planning and Investment forecast in its report at the government meeting in August that BoP deficit in 2010 could reach $4 billion, thus making the country’s foreign exchange reserves lose another 2.5 weeks of imports.
Thoai Tran
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