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Dollar price on the rise, dual exchange rate mechanism comes back   2011-08-28 - VnExpress

The dollar price quotation list seems to have no significance these days, because the actual transaction prices are higher than the quoted levels.

 

On August 24, the interbank dong/dollar exchange rate increased by 10 dong to 20,628 dong per dollar. The dollar price quoted by commercial banks has immediately increased to 20,834 dong per dollar, equal to the ceiling level.



However, in fact, right on August 23, businesses had to buy dollars at 21,000 dong per dollar, which was just a little lower than the black market price and quite different from the price quoted by commercial banks.



The director of a plastics company in Tan Tao Industrial Zone in HCM City said, that on August 24, he had to purchase dollars from a bank at the price of 21,000 dong per dollar, higher than the ceiling allowed level of 20,834 dong per dollar.



The dollar price then soared to 21,030 dong on the morning of August 25, even though the ceiling dollar price remained unchanged. Of course, dollar buyers cannot enter the actual dollar prices in the accounts. The declared dollar price would be 20,834 dong per dollar, while the other expenses would be “legalized” by the company’s accountants.



According to the businessman, buyers now have to pay additional fees, which make the actual prices of the dollar higher than the quoted levels. The additional fees depend on the relations between clients and the banks. The fees would be higher for the clients who do not have close relations with the banks, or the ones who are not the loyal clients.



“If you are a loyal client, you would have to pay the fee of one percent,” he said.



Deputy General Director of an import-export company in HCM City also complained that his company has to pay the additional fee of 0.6-1.5 percent, and that it is very difficult to legalize the spending item.



Meanwhile, business director of a gold company said that though he is the loyal client of a bank, he still had to pay 21,000 dong per dollar. His company needed dollars immediately to import gold.



“We imported gold when the prices were high, but the prices have decreased while the imports have not been sold,” he complained. “We will incur double loss if the dollar price increases further in the time to come, because we will have to buy expensive dollars to pay bank debts.”



In HCM City, the black market dollar price jumped to 21,100 dong per dollar on the morning of August 25. In Hanoi, the foreign currency exchange shop on Tran Nhan Tong Street, quoted the opening prices at 20,970-21,020 dong per dollar (purchase and sale prices). However, just one hour later, at 10 am, the dollar price soared to 21,000-21,100 dong per dollar.



The dollar price fluctuations have prompted people to buy dollars as they fear the dollar price would increase further. The owner of an exchange shop on Nguyen Hue Road in district 1 in HCM City said that the purchasing power was weak earlier yesterday, but when the dollar price increased more sharply, the number of buyers increased gradually.



The owner of a gold shop on Ha Trung Street also said that the number of dollar buyers has increased over the last two days.



An officer of a bank branch on Tran Hung Dao Street said that the bank’s website quoted the prices at 20,830-20,834 dong per dollar, but in fact, the bank branch does not have enough dollars to sell.



“The dollar supply has become short over the last two days,” she said on August 25.



As such, the dollar price keeps rising despite the statement made before by the newly appointed Governor of the State Bank of Vietnam, Nguyen Van Binh, that the dollar supply has become profuse and that a surplus of 2.5-4.5 billion dollars would be seen by the end of the year.



Binh also said that since April, the central bank has attracted six billion dollars from the market to increase the foreign currency reserves, which allows the bank to make intervention into the market when necessary.



However, Binh has admitted that the exchange rate may be put under the hard pressure because of the gold price increases, which would encourage the gold import.



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