VietNamNet Bridge – The dollar price has been fluctuating so
heavily since the market re-opening after the Tet holiday. However, experts
believe that this does not mean the start of the dong depreciation wave.
The greenback has unexpectedly
appreciated against the dong after a long stabilization period
On February 19 morning, the
dollar prices in the black market in Hanoi hovered around VND20,930-20,990 per
dollar (buy and sale). The price level was VND90 per dollar higher than that of
the day before, but represents a VND110-120 per dollar increase in comparison
with pre-Tet days.
The upward tendency of the dollar
price seems to be firm with the dollar price on the afternoon of the day rising
to VND21,010 dong per dollar.
Commercial banks have also
adjusted their dong/dollar exchange rates after two years of keeping it
unchanged. Vietcombank, for example, quoted the dollar price at VND20,830 per
dollar on February 18, the first post-Tet working day, or VND30 per dollar
higher than the previous exchange rate. The dollar price quoted by the bank
then rose by VND10-30 per dollar the next day.
With the latest adjustments, the
exchange rate in the black market is VND100-115 per dollar higher than the bank-to-business
market. This is really a big gap in the dollar prices in the two markets, if
noting that the gap was just VND10-25 per dollar on pre-Tet days.
The noteworthy thing was that the
dollar unexpected increased even though the interbank exchange rate announced
by the State Bank had been stable at VND20,828 per dollar at least until the
end of February 19.
The dollar price increases have
not frightened people at all as forecast. The appreciation of the greenback has
been explained by the high demand at the moment from a group of clients who
need dollar to remit to their children who are studying overseas.
“When the dollar price hit the
VND20,900 per dollar threshold, banks have rushed to sell dollars, thus making
the dollar price come back to the VND20,880 dong per dollar,” a senior official
of the State Bank said on Thoi bao Kinh te Vietnam on February 20.
The senior officials’ words could
be understood that banks rushed to sell dollars as soon as they saw the
opportunities to earn money when the dollar price goes to the price level high
enough. The move of selling dollars by banks showed that their dollar positions
remain stable and they don’t lack dollars at all and don’t need to step up the
dollar purchase at this moment.
The above said senior official of
the State Bank affirmed that though the dollar price has increased slightly,
but in general, the demand and supply remain stable and that the situation is
not so bad that needs the intervention by the Sate Bank.
Currently, commercial banks can
set up their dollar price at up to VND21,036. However, in fact, the exchange
rates quoted by banks are still far below the ceiling level.
There is another reason which
might have influenced the dong/dollar exchange rate these days: the dong supply
has become more profuse.
Thoi bao Kinh te Vietnam has
reported that the dong was once in short in the first month of the year (the
dong supply reduced by 0.53 percent in January in comparison with the end of
2012) due to the high demand for making payment, has become profuse again.
By February 7, or until the Tet
holiday, the dong capital mobilized by the banking system had increased
slightly by 0.17 percent in comparison with the end of 2012, but had increased
more sharply by 1.2 percent by February 18.
Vu Phong
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