Dollar keeps upward trend against dong

The US dollar continued to rise November 24, reaching VND19,770 on the black market, up VND200 on Monday, following the increased inter-bank rate of the State Bank of Viet Nam.

The central bank yesterday added an additional 3 dong to the inter-bank rate, bringing it to VND17,030 per dollar. So far this year, the dollar on the banking market has appreciated about 5.18 per cent against the dong.

However, many foreign exchange dealers on Ha Trung and Tran Nhan Tong streets said there was no sign of an immediate rush for the dollar.

Responding to a rumor that many people had-withdrawn savings to buy dollars, Governor Nguyen.Van Giau told Viet Nam News that: "Commercial banks have reported it is not correct. Deposit accounts at banks remain unaffected."

Shortage of dollars

The dollar rise was blamed on a shortage on the market. Mr. Giau explained that this was the result of the global recession making the major sources of dollars, including exports, foreign direct investment, remittances and tourism shrivel, thereby reducing supplies.

Governor Giau confirmed that the central bank had prepared an additional dollar supply to ease tensions. However, details about the plan was not disclosed.

Vu Thanh Tu Anh, Research Director at the Fulbright Economics Teaching Program in Ho Chi Minh City, suggested Viet Nam should hasten the equitisation of State owned enterprises to attract foreign capital from abroad, and thereby introducing more dollars into the domestic economy.

"That solution seems to be the best way to solve the forex question at this time because it can cool the forex market and accelerate the equitisation of state owned sector - both of which Viet Nam wants," he said.

On the precious metal market, gold yesterday steadily hovered around VND28.4-28.6 million (US$1,450) per tael.

Compared to prices on Monday, the buying price was up VND200,000-300,000 per tael but the selling price remained pretty much unchanged. People remained cautious with their trading decisions.

Source: VNA

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