VIETNAM - Currency continues to slide against dollar

by lexie Thu Dec 15, 2011 5:49 pm

December 15, 2011

Currency continues to slide against dollar

After more than a month of keeping the interbank exchange rate unchanged, the State Bank of Viet Nam yesterday raised the forex by VND10 to VND20,813 per dollar, its highest level this year.

The interbank dollar exchange rate has advanced VND185 per dollar, or 0.9 per cent, since September when the central bank committed to keeping the forex fluctuation under 1 per cent until the end of this year.

Following the move, Vietcombank yesterday also lifted the dollar exchange rates by VND8-10 over the previous day to VND21,015/21,019. Vietinbank quoted the greenback at VND21,018/21,021 while Eximbank and ACB figures were VND21,000/21,021.

On the black market, the greenback stood at VND21,130/21,180 per dollar, up VND30 over the previous day.

Vice chairman of the Lien Viet Post Bank, Nguyen Duc Huong said there was no cause for concern as the increase of forex rate was still under the threshold of 1 per cent committed by the central bank.

Huong attributed the surge to a rising demand for dollars in the domestic market at the end of the year when demand for US dollars increased due to rising imports and repayment of foreign currency loans.

The devaluation of dong against dollar was also considered a measure to boost exports, he said.

Experts said the forex rise would not significantly impact the market, explaining that the Government had so far successfully controlled the black market through strict fines.

The Ministry of Planning and Investment last week estimated the balance of payments was expected to see a surplus of US$3.1 billion this year, which will also help keep the forex market stable.

As for the domestic gold market, traders yesterday reduced the price to VND44 million per tael (1.2 ounces), down VND130,000 against the previous day in the wake of a sharp slide of 2.1 per cent to $1,671.96 an ounce on Tuesday on the world market. SJC quoted gold at VND43.77/44.02 million per tael yesterday while Bao Tin Minh Chau listed at VND42.93/43.10 million. Gold price in the domestic market was still roughly VND2 million higher than that in the world market.

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