The State Bank of Viet Nam cracked down on foreign currency exchange violations on June 6 in an effort to end US dollar speculation.
The SBV governor issued Document 5063/NHNN-QLNH on June 6 to ask leaders of SBV’s branches in cities and provinces nation-wide to tighten supervision of foreign exchange activities in their localities.
Under current regulations, agents can buy foreign currencies from individuals, but are not allowed to sell them back to individuals. They can only sell to credit institutions.
However, in practice, individuals have been buying foreign currencies, including the US dollar from exchange agents.
“Over the past few days, the exchange rate of the dollar against Vietnamese dong on the free market has increased sharply and unusually due to rising demand and speculation,” read the SBV document.
“That has triggered adverse impacts on the psychology of residents and enterprises.”
SBV asked branches to hand out serious penalties for illegal foreign exchange activities, including temporarily suspending operation or withdrawing operation licences.
The central bank also asked branches to send in daily reports on their supervision activities and violations.
Over the past few days, dollar prices have been pushed up to a record rate of VND18,500 per dollar on the black market, while the interbank rate hovered at VND16,200 .
Tran Bac Ha, management board chairman of the Bank for Investment and Development of Vietnam, attributed the rise to speculation and rumours.
He affirmed that foreign currency reserves of the central bank could intervene in the market. The flow of foreign currency from foreign direct investment, tourism, overseas Vietnamese, and other sources were strong enough to supply foreign currency into the local market, therefore the Vietnamese dong should not be dropping.
There was also no evidence supporting the runour that the Vietnamese Government would devalue the Vietnamese dong, as dollar rate stabilisation has become essential, he said.