The police have set up a committee to investigate the origin of the fabricated information, speculation about that the President of the Bank for Investment and Development of Vietnam (BIDV) was arrested.
This news was announced by Police Major General Nguyen Hung Linh, director of the National Security Police in charge of fiscal, monetary, investment crimes (A84) under the General Security 2, Ministry of Public Security, on Feb 22 evening
|Tran Bac Ha chairing a meeting at the BIDV – (Photo: BIDV)|
The police suggested that the rumor may be part of a trick carried out by a group of stock investors and financial speculators who might have earned hundreds of billions of dong just by setting it up (VND100 billion = $4.8 million).
"Obviously those who set it up are trying to undermine the market and affect national monetary security,” Linh said.
"The false information not only affects the personal and BIDV’s reputation, but also affects other people and destabilizes the local financial market, so we the Ministry of Public Security decides to search for those behind this,” he added.
Linh said initial information showed signs of profiteering, seriously impacting the country’s financial market.
He also added that this was a serious incident so A84 will be cooperating with the other agencies to run the investigation.
Meanwhile, the State Bank of Vietnam (SBV) released a statement yesterday (February 22) revealing it is ready and willing if intervention is necessary to stabilize the foreign exchange market.
Rumor circulation on February 21 was that Tran Bac Ha, President of the Board of Directors of the Bank for Investment and Development of Vietnam (BIDV) had been arrested
Also during this session, rumors of a high CPI rise in February, and an increase in the price of gasoline arose.
The monetary market was immediately plunged into chaos. The stock market’s VN-Index lost 18 points – the sharpest fall over recent six months.
The exchange rate also skyrocketed to surpass the VND21,000/US dollar mark and people rushed to gold shops for bullion.
Many banks, including Vietcombank and ACB, also raised the price to the VND21,000 mark. At Eximbank, the USD price at the end of the day was VND20,990 per dollar.
Local gold prices yesterday continued to soar after the sudden rise in demand in Hanoi and Ho Chi Minh City, widening the gap between the local and international price to some VND5 million a tael.
The local gold price has recently been VND4-4.5 million a tael higher than its world counterpart.
The most severely affected financial sector was the stock market, with the Hanoi and HCMC indexes, HNX-Index and VN-Index, respectively, in a freefall.
The VN-Index saw the sharpest decline since the one following the arrest of financial tycoon Nguyen Duc Kien on August 23, 2012.
By the end of the session, the VN-Index lost 18.1 points, or 3.66 percent, falling to 476.73 points, while the HNX-Index fell 5.3 percent, the most in six months. Many investors are concerned this will continue into the Friday session.
According to the Ho Chi Minh Stock Exchange (HoSE), VND28.9 trillion in capitalization evaporated, falling to VND780.1 trillion, a decrease of 3.57 percent.
On the Hanoi bourse, HNX capitalization fell 4.83 percent to VND95.96 trillion, equivalent to a VND4.87 trillion loss.
|Vietnam's stock market loses nearly VND34 trillion in capitalization by the end of Thursday|
Thus, Vietnam's stock market had lost nearly VND33.8 trillion, or more than $1.6 billion, in capitalization by the end of Thursday.
After the rumors were denied, shares rallied on February 22, with VN-Index increasing 0.96 points. Commercial banks lowered their exchange rates to below the VND21,000 per US dollar mark.
In a notice released by the State Bank of Vietnam (SBV) on Friday morning, the bank said it is working with the Ministry of Public Security to clarify the source of the rumor to coordinate with ministries, its branches and local People's Committees to take appropriate measures to strictly handle such illegal business, especially those in the black market.
The bank also cautioned people against acting on misleading information to avoid unwanted losses.
With around $30 billion in foreign exchange reserves, the State Bank of Vietnam is capable of intervening in case of volatility, SBV Vice Governor Le Minh Hung told the media.
An SBV official earlier also confirmed that it is not the right time to adjust the exchange rate.