Central bank retains FX rate

"At present, the central bank does not have any plans to adjust the foreign exchange rate" as the US dollar price yesterday October 18 in the free market reached almost 20,000 dong per dollar, said State Bank of Vietnam (SBV)'s governor, Nguyen Van Giau.

After chair of the US Federal Reserve (Fed), Ben Bernanke, expressed wary in deploying the QE2- Quantitative Easing 2 (the relaxed monetary policy through the continued pumping money to save the economy) last weekend, the US dollar price in the world market increased by 0.2 percent against the euro and some other key currencies.

Accordingly, on morning October 18, the US dollar price in the free market in HCM City suddenly jumped to 19,980 dong/US dollar (buying) and 20,800 dong/US dollar (selling) from 19,850 dong/US dollar (buying price) and 19,930 dong/US dollar (selling price) in last weekend, increasing 870 dong/US dollar.

Additionally, at 10:00-11:00 am on the same day, many shops raised the FX rate to 21,000 dong/US dollar. However, in the afternoon, the FX rate started to decrease gradually to 19,920 dong/US dollar (buying) and 20,000 dong/US dollar (selling) at 4:30 pm.

Along with the free market, as reflected by a number of businesses, at some commercial banks, the transaction fee of US dollar was also raised but it remained acceptable.

As one of the businesses that have to pay urgently for a foreign supplier, Tran Thi Anh Lan, a business owner in Binh Thanh District, HCM City said: "At 10:30 am, the dong/US dollar FX rate listed at commercial banks remained from 19,490 to 19,500 dong per dollar, but when including transaction fees, the selling price of US dollar was at 19,950 dong per dollar"

As noted by reporters, not all individuals and business can buy US dollar at above price level at commercial banks, only "trusted" customers who used to open the letter of credit (L/C) and have clear documents and procedures will be approved for purchase US dollar.

According to enterprises, usually in the last months of year, due to business needs dollars to pay or import goods for sales on the occasion of Tet holiday so the US dollar price often increases. 

Unlike previous years that after increasing the US dollar price would decrease again, from August to now, the FX rate is still in an uptrend.

Although earlier, according to Nguyen Hoang Minh, SBV's HCM City branch deputy director, the amount of remittances sent to the city was estimated to increase 20 percent over the same period. Besides, according to figures from commercial banks, in the first nine months, the amount of remittances sent to Vietnam through commercial banks as well as economic institutions in HCM City reached over $3.04 billion, up 17.94 percent over the same period.

Tran Huy Hoang, head of Bank Department of HCM City Economics University said that this stage is the maturity of foreign currency loans, so there is pressure on the supply and demand of foreign currency. On the other hand, the higher domestic gold price against the world price also causes pressure on the FX rate.

On afternoon October 18, while the world gold price was at $1,360.5/ounce, down $8.4/ounce from previous day, the domestic SJC, SBJ, PNJ-DAB gold price were at 33.07-33.09 million dong per tael (buying) and 33.12-33.15 million dong/tael (selling price), higher by 400,000 dong per tael against the world price.