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VND continues to slide against USD
The State Bank of Viet Nam once again devalued the Vietnamese dong against the US dollar yesterday, adjusting the interbank exchange rate by another VND10 per dollar to VND20,678.
This marked the fifth incremental change in the exchange rate announced by the central bank since last Wednesday and, with the domestic currency having now depreciated by VND50 since last month, represents the dong's weakest point since May.
The State Bank also set the ceiling exchange rate for commercial banks yesterday at VND20,885 per dollar. Commercial banks are allowed to trade within 1 per cent of the interbank rate, so this figure represents the upper end of the range.
Commercial banks have raised their exchange rates accordingly, with Vietcombank, the Bank for Investment and Development of Viet Nam (BIDV), Eximbank and Asia Commercial Bank posting buy/sell rates yesterday ranging from VND20,870 to VND20,885 per dollar.
In contrast, the forex rate on the black market declined by VND50 to VND100, with buy/sell rates as of 1pm yesterday of VND21,350-VND21,450.
Tran Thanh Long, an employee of Phu Quy Group shop on Tran Nhan Tong Street said that the drop in US dollar prices on the black market had been caused by low demand.
In August, State Bank of Viet Nam Governor Nguyen Van Binh said that the value of the Vietnamese dong would not depreciate by more than 1 per cent against the US dollar through the end of the year. With the devaluation yesterday, the value of the dong has fallen 0.25 per cent so far.
However, Ministry of Finance's official Vu Dinh Anh told Saigon Economic Times that the recent devaluation had followed a long period of extremely stable exchange rates. An adjustment was now considered critical to maintain this stability in the forex market, Anh said.
He forecast that demand for US dollars would soar in the next few months, but he said that the central bank's increased foreign reserves, a surplus in the nation's balance of payments, and US dollar supplies in commercial banks would help satisfy any rising demand for the dollar.
Meanwhile, investors appeared to be continuing to look to gold as a safe harbour, and domestic gold prices rose for a third straight day yesterday, picking up VND400,000 (US$19.20) per tael. (One tael is equal to 1.2 ounces.)
As of 3pm yesterday, Sai Gon Jewelry Co posted buy/sell prices of VND43.85 million/VND44.17 million per tael. At the same time, the spot price on the London Bullion Market was $1,677.1 per ounce.
vietnamnet, VNS
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