During
the adjacent days of Lunar New Year (Tet) holiday, Vietnam's forex market did
not witness many changes. The forex rate on the free market was close to the
official forex rate at banking system, the local newspaper Saigon Giai Phong
reported.
From middle of January 2012, the US dollar
trading situation at banks as well as on the free market has slowed markedly.
Particularly, on January 18, US dollar selling
price at commercial banks suddenly slipped to 21,000 dong each, down by 106-116
dong/US dollar from a day earlier. The US dollar price on the free market also
dropped to below 21,000 dong each.
Notably, also on January 18, the State Bank of
Vietnam (SBV)’s transaction office raised US dollar buying price to 20,850 dong
each, up 230 dong from previous days. Facing this situation, some people said
that the central bank is buying US dollar for reserve.
In the two following days on January 19 and
20, the quoted US dollar prices at banks continued to fall further by 20 dong
in both buying and selling prices.
Leader of a large bank said that the US dollar
supply at banks is in surplus and the demand of customers is not very high. The
negligible gap between US dollar price on the free market and US dollar price
quoted at banks is a strange phenomenon compared to the previous years as the
US dollar demand during adjacent days of Lunar New Year (Tet) often surged
sharply and the central bank always had to struggle to run the forex rate.
In 2011, the central bank took the initiative
and flexibility in operating the forex rate. The continuous adjustments of the
interbank forex rate, applying the foreign currency interest rate cap and
tightening the foreign currency trading activities have reduced the foreign
currency speculation. The strict sanctions for violations of illegal foreign
currency transactions are also contributing to reducing the dollarization
phenomenon in the economy.
On the other hand, the supply of foreign
currency in the economy has also been more abundant thanks to the amount of
inward remittances in 2011 was up to $9 billion and other foreign currency
flows such as foreign direct investment (FDI) and official development
assistance (ODA) still remained positive. Meanwhile, the country’s trade deficit
in 2011 was only about $9.8 billion, down 22% compared to 2010.
This is a relatively positive signal on the
forex market this year.
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