Dollar unexpectedly jumps

The US dollar exchange on free market in Ho Chi Minh City sharply changed on October 18 as the greenback gained 0.2 percent against the euro and other major currencies after the US Federal Reserve chairman Ben Bernanke signaled last week more so-called quantitative easing was likely gradual.

In the morning, dollars were bought at VND19,980, and sold at VND20,800, an increase of VND870 per dollar over last weekend.

Between 10 and 11 am the same day, the rate was raised to VND21,000 per dollar at some currency exchange agencies. However, the price started to decline in the afternoon and closed at VND19,920 for buying and VND20,000 for selling as of 4:30 pm.

Meanwhile, some firms said that dollar transaction fees at commercial banks also escalated gradually but remained at affordable levels.

Tran Thi Anh Lan whose firm had to pay an urgent payment to its foreign supplier said that commercial banks still fixed the dollar exchange rate around VND19,490-19,500 per dollar as of 10:30 am. However, after including transaction fees, a dollar cost VND19,950.

It was reported that banks only approved familiar clients who used to open the letter of credit at their banks and are able to show valid receipts to buy dollars at that rate.

According to firms, the price of dollar usually rises by the year’s end as the demand for foreign currencies to settle firms’ payments increases. The rate often cools down after rallies; however, it has kept rising since August this year, though a report by the State Bank of Vietnam HCMC-branch said the amount of remittances to the city estimably rose by 20 percent year-on-year. Data from local commercial banks also showed that remittances in the first nine months of this year reached US$3.04 billion, up 17.94 percent year-on-year.

The supply and demand of foreign currency strained as foreign currency loans in the early months of this year became mature at this time, said Associate Professor, PhD. Tran Huy Hoang, Dean of Banking Faculty of the Ho Chi Minh City University of Economics.

In addition, gold prices also imposed a great pressure on the dollar exchange rate.

Yesterday, the price of gold in Vietnam was at VND33.07-33.09 million a tael for buying and VND33.12-33.15 million for selling while global price stood at $1,360.5 an ounce, down $8.4 an ounce over last weekend.

Domestically, gold fetched VND400,000 a tael higher than global prices.