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Dollar price reaches highest peak in history   2009-09-10 - TBKTVN

The VND/US$ exchange rate has reached the highest peak in history: commercial banks all quoted the exchange rate at 17,832 dong per dollar this morning.


The dollar price climbed to the highest ever level of 17,832 dong per dollar this morning after the State Bank of Vietnam announced the interbank exchange rate of 16,983 dong per dollar.


The interbank exchange rate has been increasing continuously since the end of August. On September 9, 2009, the exchange rate exceeded the 16,980 dong per dollar threshold to reach 16,981 dong per dollar. And the official exchange rate increased further by two dong per dollar this morning.


The interbank exchange rate is the official rate announced daily by the State Bank of Vietnam, which commercial banks refer to when defining their exchange rates for transactions. The official exchange rate and the rates applied by commercial banks in transactions have a close tie to the trading band. The five percent trading band means that the exchange rate quoted by commercial banks must not be higher or lower by five percent than the official exchange rate.


The VND/US$ exchange rate of 17,832 dong quoted by commercial banks this morning was the highest possible rate, or five percent higher than the official exchange rate.


However, the interbank exchange rate of 16,983 dong per dollar which the central bank announced this morning is not the highest level in the history.


The highest peak was seen on December 25, 2008, when the interbank official exchange rate was announced at 16,989 dong per dollar. The day witnessed a sharp jump in the official exchange rate from 16,494 dong to 16,989 dong per dollar, or three percent.


The interbank exchange rate had been hovering around 16,980 dong per dollar from that day until mid February 2009. However, the commercial sale price of the dollar at that time was not at the highest peak in history, since the trading band applied for that time was three percent only, which meant that the exchange rate quoted by commercial banks was 17,500 dong per dollar only. The five percent trading band has only been applied since March 24, 2009.


From late March to late July, the interbank exchange rate decreased sharply with the rate on some days down by 10 dong per dollar.


However, since the end of July, the interbank exchange rate has been increasing again, but still has not repeated the highest peak of December 25, 2008.


Since the beginning of the year, the VND/US$ exchange rates quoted by commercial banks have always hit ceiling levels. Commercial banks, since June 11, 2009, have been applying an exchange rate policy under which purchase and sale prices are the same.


The dollar shortage has become serious recently, as businesses complain that they cannot purchase enough dollars to make payment for imports, though the State Bank of Vietnam affirms that Vietnam does not lack dollars.


However, in the latest report, the central bank has reported that the shortage has been eased. Enterprises and people who have earnings in dollar have begun selling dollars instead of keeping money in accounts or under their pillows.


Meanwhile, more and more businesses have decided to borrow dollars instead of purchasing dollars to serve payment for imports, thus having helped ease the dollar’s short supply. That explains why dollar loans increased rapidly by 1.2 percent in July and 1.52 percent in August. The US$ deposit interest rates, therefore, have been increasing from 3-3.5 percent in late August to 4.15 percent now.


According to the General Statistics Office, the dollar price in August 2009 increased by 6.36 percent over December 2008 and 8.95 percent over the same period of 2008.

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