Businesses shun ban on payment in dollar

Payments in dollar were still carried out publicly in spite of the government’s ban, triggering worries about the dollarization – a factor causes instability of the economy, economists warned.

A cash teller puts a pile of US dollars into a cash counting machine at a HCMC-based branch of Asia Commercial Bank (Photo:Minh Tri)

The Circular No. 11/2009/TT-BCT by the Ministry of Trade and Industry regulates that the fine for illegal price quotation and purchases by foreign currencies is up to VND30 million (US$15,000).

However, many businesses tried to dodge the regulation by using price quotations in Vietnam dong, which are converted from dollar prices.

A builder, who asked not to be named, disclosed property firms favored payments in US dollar for real estate purchases as the dong weakened every day.

“It takes several years to finish a property project. Therefore, payments in dong will make builders incur losses amid the fluctuation of the foreign exchange rate between dong and dollar,” he said.

Do Thi Loan, general secretary of the Ho Chi Minh City Real Estate Association, said the habit of carrying out payments in gold bars or dollar for property purchases remained existed.

Prices of products including computers, cameras, washing machines, television and air conditioners at most electrical appliance stores are quoted in dong, but being instantly adjusted in accordance with the fluctuation of the dollar-dong exchange rate.

An owner of a camera shop in downtown said “my products are imported from abroad, so I will suffer losses if I sell them in dong. Besides, most customers prefer products with prices quoted in dollars as they favored imported ones. They are willing to pay in dollars.”

An auto showroom in Tan Binh District sells a Mini Cooper at $54,000. “As it was imported from abroad, it has to be sold in dollar,” a salesman at the showroom told Dau Tu Tai Chinh Newspaper.

Most English language centers in the city also announce their tuitions are in dong, which are converted from the amounts in dollar. Foreign-owned foreign language centers said they had to set their tuitions in dollar amid their foreign teachers, foreign curriculums and even rentals in dollar.

“Quotations in dollar and even ones in dong, which are converted from the value in dollar, are considered as violations of the government’s regulation,” said Dang Van Duc, head of the Market Control Department.

“The HCMC Market Control Department is asking relevant units to keep close eyes on the market and strictly punish violations. Quotations in dong, which are converted from values in dollar, will also be fined if we catch them in red-handed.”

By Thanh Dung and Yen Lam – Translated by Vu Minh

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