VND- Dual forex rates reappear on dollar constraint

August 26, 2011



Dual forex rates reappear on dollar constraint



The dual forex rate phenomenon has reappeared in Vietnam after the end of last year due to rising demand against the falling supply of the greenback.




Though being officially listed at VND20,834 per dollar by lenders, businesses and individuals have started to buy or borrow it VND200-300 a dollar more expensive.


But the State Bank of Vietnam today maintained the interbank average exchange rate at VND20,628 a US dollar despite recent constraint, thus forcing commercial banks to continue selling the greenback at the ceiling rate of VND20,834 a dollar.


So, banks still nominally posted their bid price for US dollar at VND20,834 under the central bank’s regulation, but in fact, the selling prices applied for customers have been raised 1-1.5 percent.


VnExpress quoted the director of a plastics manufacturer in Ho Chi Minh City’s Tan Tao Industrial Zone saying that his company had just bought the greenback at VND21,000 a dollar on Wednesday, and paid a little more, VND21,030 a dollar on Thursday.


A gold firm told Tuoi Tre yesterday that it had just bought the greenback at VND21,150 a dollar, up 1.5 percent against the officially listed price.


But its real purchase price is still lower than that applied for other unacquainted customers at the bank, said the gold firm.


The real prices of imported commodities, including gold, will be far different from those that use the officially listed forex rates.

The return of deficit


Vietnam's trade balance had a deficit again this month, at $800 million, after enjoying a surplus of $1.1 billion last month, said General Statistical Office (GSO).


In August alone, the country's export turnover fetched $8.3 billion, down 10.9 percent from July.
Apparel product is the single export item earning over $1 billion in export turnover in August, equaling to the figure in the previous month.


Some other key export commodities reached high export turnover including crude oil ($750 million), seafood ($590 million) and rice ($284 million).


Notably, the country's total export turnover for gemstone and precious metal reached only $200 million in August, down 82 percent from the previous month. The exports of this group have brought about the aforementioned trade surplus of over $1.1 billion in July.


In August alone, the country's import spending was $9.1 billion, up 10.7 percent month on month.


Vietnam mainly imported some key commodities such as oil and gas ($976 million), up nearly 99 percent month on month, cloth ($540 million), equaling to the figure in July, computer and components ($600 million), up 5.4 percent month on month.


In the first eight months of this year, Vietnam's total export turnover is estimated to have reached $60.8 billion, up 33.7 percent from the same period last year.


The export turnover of domestic firms reached $28.1 billion, or 46.2 percent of the country's total figure, up 32.6 percent year on year.


The country's total import value in January-August was estimated at $67.02 billion, rising 25.4 percent year on year, of which, the import spending of domestic companies was $36.9 billion, equaling 55 percent of the country's total import value.


The trade gap situation is different for Vietnam’s 2 biggest cities of Hanoi and Ho Chi Minh City.


HCMC sells more, Hanoi buys more


In the first eight months of this year, HCMC's total export-import turnover (excluding crude oil) is estimated to reach $29.98 billion, up $4.65 billion, or 18.4 percent, from the same period last year, according to the municipal Statistics Office.


Totally, in January-August, the city's export turnover reached $18.3 billion, up 29.5 percent year on year, of which, domestic sector enjoyed $14.181 billion, up 20.9 percent year on year.


The city's export turnover in August was estimated at $2.53 billion, down 20.8 percent from July, of which the state sector decreased 25.3 percent and foreign-invested economic area increased 0.9 percent month on month.


In August, its import value was $2.15 billion, up 2 percent month on month, of which, import spending of domestic economic area increased 2.4 percent and foreign-invested economic area increased 0.8 percent.


In comparison with the same period in 2010, the city's import value increased 21.5 percent.


Totally in January-August, the city's total import value was $16.75 billion, rising 24.5 percent year on year.


Thus, in August, HCMC continued to enjoy a trade surplus of $386.5 million, bringing the total trade surplus in January-August to $1.53 billion.


Unlike the trade surplus situation of HCM City, in August, Hanoi continued to have a trade deficit of about $1 billion, according to Hanoi Statistics Office.


Particularly, in August, Hanoi's export turnover reached $982.5 million, down 0.7 percent from July and up 34.4 percent from the same period last year.


Also in August, some export items gained high value from previous months including coffee (up 42.2 percent), electronic products (up 6.7 percent), electricity wires and cables ( up 5.9 percent).


The city's import value in August was $1.99 billion, down 0.8 percent month on month but up 4.5 percent year-on-year.


Totally in January-August, the capital city's export turnover reached $6.36 billion, rising 27.2 percent year on year, of which the export turnover of domestic economic area increased 23.5 percent.


Thus in January-August, the city's import value was $16.36 billion, up 18.1 percent year on year.


Therefore, in August, Hanoi continued a trade deficit of about $1 billion, bringing the total figure in January-August to nearly $10 billion.


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