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Vietnam - Experts: Forex market remains stable DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Vietnam - Experts: Forex market remains stable

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Vietnam - Experts: Forex market remains stable Empty Vietnam - Experts: Forex market remains stable

Post by lexie Mon Oct 17, 2011 1:29 pm

October 17, 2011

Experts: Forex market remains stable

Local financial experts have yet to see signs of volatility on the foreign exchange market though the dong has depreciated against the U.S. dollar on the inter-bank and unofficial markets over the past few days.

The State Bank of Vietnam last Tuesday continued to increase the forex rate on the inter-bank market by VND15 to VND20,668 per dollar. After several rises earlier, it jumped by VND40 after staying unchanged during September.

According to the general director of a large lender bank, the modest rise at under 20 basis points is necessary after the central bank kept the rate at VND20,628 for a long time. U.S. dollar demand is normal now, and the bank still has enough dollar funds for enterprises, he said.

Vu Dinh Anh, deputy director of the Finance Ministry’s Market and Price Research Institute, said the exchange rate adjustment is drawing much attention as it has happened repeatedly in recent times. The exchange rate should be revised every day following market demands to become a base for commercial banks to buy and sell dollars.

If the exchange rate stays unchanged, banks will list ceiling buying and selling prices but in fact, they add more fees to push up prices given market demands, Anh explained.

According to the central bank, the country had a current accounts surplus of US$1.3 billion in the first seven months of 2011 while it posted a deficit of US$3.2 billion in the same period last year. The nation’s capital and financial accounts had a surplus of US$9.8 billion while last year’s surplus was only US$4.57 billion.

Meanwhile, foreign currency flows remain normal in the banking system with collection staying at US$809 million and expenditure at US$745 million as of September. In September, dollar deposits by credit institutions at the central bank had surged by US$586 million, or 45%, against August.

Although dollar demand traditionally rises in the final months of the year, there will be no pressure on the exchange rate as seen in previous years given the high surplus and rising foreign reserves.

Saigon Jewelry Co. (SJC) and banks have reportedly spent a lot of dollars on overseas gold trading accounts, triggering a higher exchange rate over the past few days. However, a representative of one of the banks said they have to put only 7.5% in collateral for opening the accounts, which is inconsiderable compared to that for gold imports.


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