VietNamNet Bridge – The dollar price quoted by commercial banks and the price
in the black market bounced back earlier this week. However, after that, the
dollar price has decreased again. The State Bank has sent noticeable signal
about the dong/dollar exchange rate.
On March 5 morning, commercial banks all raised their quoted dollar prices. It
was for the second time after Tet holiday the dollar price exceeded the
VND21,000 dong per dollar threshold, marching towards the ceiling level of
VND21,036 dong per dollar.
However, on March 6, the dollar began depreciating. Banks reduced the quoted
price to below VND21,000 per dollar with the quoted price hovering around
VND20,980 per dollar.
While experts were busy analyzing the phenomenon to find out the reasons behind
the sharp rise of the dollar prices. The State Bank made some adjustments,
sending signals to the members of the interbank foreign currency market.
On March 5 and 6, the State Bank unexpectedly reduced the dollar sale prices
sharply. A report of the watchdog agency showed that after one year of keeping
the dollar ceiling sale price level at VND21,036 per dollar, the level has been
lowered to VND20,950 per dollar, which represented a sharp decrease of VND86 per
As such, the sale prices quoted by the State Banks Exchange were lower than
that quoted by commercial banks.
Thoi bao Kinh te Vietnam has quoted some experts as saying that the watchdog
agency implies that it is ready to sell dollars to stabilize the market at
“reasonable” prices instead of the ceiling price. The central bank has also sent
a signal that there has been no serious supply and demand imbalance which may
cause big changes in the dong/dollar exchange rate.
The analysts said this could be the main reason that has made the dollar price
decrease in the last few days.
Le Quang Trung, Acting General Director of VIB Bank, also said on VnExpress that
the State Bank has tried to cool the market down by lowering the dollar sale
price at the bank’s exchange.
The message the central bank wants to convey is that it would sell dollars at
low prices to balance the supply and demand, if necessary. “This is the timely
action by the State Bank to intervene the foreign currency market. It once did
this in 2012,” Trung commented.
Opinions vary about the factors which have led to the dollar price fluctuations
Some experts believe that the smuggling of gold rings has led to the higher
demand for dollars, once traders tried to collect dollars from the public to
make payment for the imports.
Meanwhile, others think that some small commercial banks have pushed up the
purchases to offset the foreign currencies they used before.
Especially, some have predicted that the dong interest rates would go down
further, which would lead to the narrower gap between the dong and the dollar
interest rates, and lead to the depreciation of the local currency.
While many economists urged to devaluate the local currency in order to help
boost exports, the State Bank has been insisting on its viewpoint of stabilizing
the dong/dollar exchange rate, stating that it would make intervention in case
big fluctuations occur.
The efforts to stabilize the exchange rate have been backed by the macroeconomic
indexes. Vietnam had relatively high trade surplus in the first two months of
the year, at $1.7 billion, while the surplus of $3 billion has been forecast for
the general balance in 2013.
Compiled by C. V