Economist: Necessary to learn why businesses are hoarding dollars
Businesses are all complaining they lack foreign currencies, while commercial banks do not have foreign currencies to sell to businesses. What would you say about that?
Businesses have been shouting for help and they have reason to do that. It is necessary for the State Bank to take a survey to have an accurate assessment of the situation and find out if foreign currency speculation is occurring or not.
As far as I know, we do not lack foreign currencies. Where is the foreign currency flow getting stuck, then?
The State Bank of Vietnam has affirmed that many enterprises are hoarding foreign currencies, while the foreign currency market has fallen into a supply-demand imbalance. Do you think that we need to issue a regulation requiring export companies to sell the foreign currencies they get from export deals to banks?
It has been asked why businesses are hoarding foreign currencies. We need to reconsider if the exchange rate is reasonable. I think that forcing businesses to sell dollars to banks is an administrative measure which should only be used as a last resort.
What do you think the best solution is for now, so that the enterprises which need dollars can purchase dollars from banks, while the businesses which have dollars will sell them to banks?
We need to check supply and demand in the market, and we need to control the black market. In principle, the national economy must use VND and dollarisation must not occur in the black market. If dollarisation continues in the market, and if we continue using administrative measures to deal with the problems, the foreign currency shortage will continue.
Do you think that US$ interest rates are too low and that this is prompting businesses to store up foreign currencies?
If we can convince people that we can control inflation, curbing it at a little over 6 percent as stipulated by the government, people will not hoard dollars anymore.
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* Four days ago, at a meeting between the State Bank of Vietnam and businesses, the representative of the State Bank said it is not necessary now to use administrative measures to force businesses to sell dollars.
However, local newspaper Tien Phong quoted some commercial banks as saying on May 19 that they had not seen any improvement in the dollar supply.
*Authorised foreign currency exchange points in Hanoi, including Bao Tin Minh Chau and Phu Quy (on Tran Nhan Tong street), Quoc Trinh on Ha Trung street, say that they have not purchased foreign currencies as their operation licences have expired.
Many people are reluctant to sell dollars to banks because as of May 19 they were offering 17,780 dong only for one dollar, while the exchange rate on the black market was VND18,200/US$1 the same day.
* Governor of the State Bank of Vietnam Nguyen Van Giau has, once again, affirmed that the central bank does not intend to devaluate the dong.
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