Dollar on so-called black market remains on a rise

Dollar on so-called black market remains on a rise
The US dollar on the so-called black market continues to move up in spite of the central bank devaluing the dong last week.

A pile of dollars on a desk of a cash teller at a HCMC-based branch of the Asia Commercial Bank. Despite the central bank devaluing the dong last week, the US dollar on the so-called black market continues to move up (Photo:Minh Tri)

The State Bank of Vietnam devalued the dong by 9.3 percent on February 11, bringing the official exchange rate to 20,693 from 18,932 per US dollar, and narrowed the currency's trading band to 1 percent on either side of the rate from the previous 3 percent.

The central bank said it would make a flexible adjustment for the foreign exchange rate in an effort to watch the foreign currency market’s moves closely.

However, on Feb 16th, despite the state bank lowering the interbank price to VND20,698 per dollar,  the greenback on the so-called black market kept climbed up by VND200 to VND21,900 for one dollar.

An owner of a gold shop in HCMC said a strong buying of both individuals and businesses was the main reason lifting up the dollar on the market.

One dollar at commercial banks on Feb 16th was sold at the rate of VND20,905, boosting the deficit between the official and black-market prices to VND1,000 per dollar.

Many lenders noticed the central bank devalued the dong without selling the dollar, leading people to speculate on the greenback. They said worries about a high inflation rate caused the upcoming increases in power and gasoline prices also pushed up the dollar-dong exchange rate.

Statistics from the state bank show the deposit in dollar last month increased by 4.43 percent, while the deposit in Vietnam dong slumped by 4.12 percent.

Many enterprises disclosed some lenders offered dollar at the exchange rate of VND21,230, which included consulting and payment fees.

Directors of banks said they failed to meet up with their clients’ demand for the greenbacks as a few of businesses sold dollar to them, while the central bank did not sell more.

“Some exporters are hesitating to sell dollar to banks as they are waiting for the dollar to be stronger,” said Nguyen Hoang Minh, deputy director of the State Bank of Vietnam, Ho Chi Minh City branch.

Experts said enterprises having dollars want to sell at high prices, while those who need the greenback ask lenders to sell at the prices regulated by the central bank. Therefore some lenders offered dollars with extra fees.

Minh said the central bank did not allow commercial banks to take extra fees for foreign currency purchases. He also asked enterprises to inform the central bank about violations.

“We are teaming up with market monitor units and the Ministry of Public Security to strictly supervise gold and foreign currency shops,” Minh said.

By Mai Thao – Translated by Minh Anh

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