No shortage of US dollars: deputy governor of State Bank

Many firms have said they hardly buy US dollars these days or are buying at a higher price than the top price fixed by the State Bank of Vietnam. SGGP had an interview with the deputy governor of the bank, Nguyen Van Binh, about this issue on May 14.

SGGP: Vietnam has seen a trade surplus in the first months of this year after seeing a trade gap for years. Why has speculation of the greenback become so wild?

Nguyen Van Binh: Both businesses and citizens are aware of the difficulty that our economy would face this year. A sharp reduction on the amount of incoming dollars in many fields has been forecast. These have caused an anxiety about the debasement of the Vietnamese dong that has led to speculation on the US dollar. Export firms keep the dollar in their accounts or sell a small amount while import firms buy dollars at any cost. A part of the population has also shifted to dollar deposits from dong deposits. Besides, in the black market, the speculators have taken advantage of this anxiety to make huge profits.

Which methods will the State Bank of Vietnam apply to stabilize the money market?

The bank has planned the balance of payments for the whole year under several circumstances since the beginning of this year. Even in the worst circumstance, the deficit of the dollar would only nearly reach US$2.5 billion while the bank’s dollar reserve is kept at $20 billion. The State Bank of Vietnam is able to make up any deficit in the balance of payments.

The level of the currency devaluation of a country is usually lower than the level of its inflation. Vietnam’s inflation was 19.89 percent last year and the devaluation of VND approximated to nine percent. According to the forecast of economic experts, the country’s inflation is around five to six percent, so the devaluation of VND is expected to be under that level.

The bank will also make public necessary information to provide businesses and citizens a full view of the economic situation, as well as the monetary market.

The public say that the method of foreign currency remittance should be reused to deal with the speculation of the dollar. What do you think?

Vietnam has abrogated foreign currency remittances since 2003. Meanwhile, this year, the balance of payments has been much better than last year, so we don’t need to use this method again. The speculation of the dollar by economic organizations to seek profits should be stopped and punished.

By Ham Yen – Translated by Thuy Doan

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