Banks still struggle to buy dollars from individuals

Financial experts recommend that the central bank should permit lenders to offer an extra commission to individuals selling dollars to banks in order to draw the greenback from locals and encourage foreigners to exchange dollars to the Vietnam dong.

A cash teller at the Asia Commerical Bank is counting a pile of dollars. Financial experts recommend should permit lenders to offer an extra commission to individuals selling dollars to banks (Photo:Minh Tri)

DongA Bank is the first lender announcing its policy on US dollar sales for individual clients, which started on March 23rd.

The amount of the greenback, which will not exceed US$7,000 in accordance with a regulation of the State Bank of Vietnam, will depend on clients’ usage purposes.

Tran Phuong Binh, general director of the Ho Chi Minh City-based lender, said the bank can quickly offer the foreign currency to clients in HCMC and Hanoi.

For those living other provinces should make a contact before visiting the bank’s branches to buy as DongA Bank will offer the requested amounts within seven days, with the exchange rate equal to the one at the time the exchange happens.

However, many people complaint that they were still struggling to buy dollar via banks. They said many lenders flatly refused, saying dollar were provided for import-export companies only.

Some banks said they were willing to offer currency of other countries. People, meanwhile, were not eager to sell the greenback to lenders, leaving the latter struggling to meet dollar demand of individual clients.

Many financial experts questioned whether the central bank permits commercial banks to pay an extra 2 percent to clients selling dollars to them, which will help draw foreign currencies of locals and encourage foreigners to exchange dollars to the Vietnam dong.

The State Bank of Vietnam said it has not made any decision on allowing banks to charge transaction fees when selling foreign currency to individuals.

Several bankers have said they want to charge a fee of 2 percent when selling foreign currencies to individuals to help them cover costs.

Vietnamese banks are required to sell dollars to individual clients who provide evidence that they are going to travel, study or seek medical treatment abroad.

Prime Minister Nguyen Tan Dung on March 15 confirmed the government’s intention to tighten controls over foreign currency transactions. A crackdown on illegal dollar hoarding and trading was launched late Feb, bringing the black market to a standstill.

The government last month posted a report on the prominence of greenbacks in Vietnam’s economy on its website. The report cited rampant use of the US dollar in setting prices and conducting transactions throughout the country and reminded individuals and businesses that the practice is against the law.

Dollarization in Vietnam increased steadily from 9.4 percent in 1988 to a peak of 41.2 percent in 1991. It then gradually decreased to between 22.4 to 31.5 percent from 1993–2005.

By Diu Ngan – Translated by Vu Minh

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