U.S. dollar rises to four-month high
Vietcombank bought the dollar at VND22,380 and sold it at VND22,450, up VND30 against last Friday and VND105 against last Monday. VietinBank quoted the dollar buying price at VND22,375 and selling price at VND22,455.
The respective prices at Eximbank were VND22,360 and VND22,440. The greenback has risen steadily since the beginning of last week and reached the highest level in more than four months on May 30 morning.
Late on May 30 afternoon, Vietcombank’s dollar buying and selling prices stayed unchanged. At VietinBank, the buying price fell to VND22,370 per dollar and the selling price to VND22,450. Meanwhile, Eximbank bought the dollar at VND22,360 and sold it at VND22,450.
The dollar got firmer on the informal market as well. A money changer in downtown HCMC on May 30 bought the dollar at VND22,450 and sold it at VND22,490, an increase of VND70 compared to last Friday. A shop told the Daily on the same day that it had no dollars left for sale.
According to a deputy general director of a bank, the dollar had been firmer against the dong as banks had acquired dollar funds to balance their foreign currency positions while firms’ dollar demand has remained normal.
Dollar buying and selling prices have edged up since the State Bank of Vietnam (SBV) last Friday announced details of Circular No. 07/2016/TT-NHNN that allows businesses to take out short-term loans in foreign currency with low interest rates and convert them into the dong to fund production of goods for export. The circular is effective from June 1 to December 31 this year.
Interest rates for those loans stand at 2.8-5.2% per annum while rates for dong loans range from 6.8% to 9% per year. Companies getting short-term foreign currency loans cannot use them to make payments but convert them into the local currency to finance their production plans.
Speaking to the Daily, a SBV leader attributed the sharp dollar rise on May 30 morning to a knee-jerk reaction on the market, saying that corporate demand for dollars has remained normal and that the central bank would intervene if necessary.
From April 1, the SBV began strictly supervising short-term foreign currency loans for firms to prevent dollar hoarding, and encouraging dollar buy and sell transactions to ease pressure on dollar demand. However, the central bank permitted those firms making offshore payments and investing in foreign markets, and petroleum importers to continue taking out loans in foreign currency.
Do Thien Anh Tuan, a lecturer at the Fulbright Economics Teaching Program, told the Daily last month that the central bank discourages dollar borrowing and lending but this policy must be adjusted to make it appropriate to different groups of businesses.
Tuan said firms having foreign currency revenues should be allowed to get foreign currency loans. A ban should be imposed on businesses that do not generate foreign currency revenues and individuals who borrow foreign currency for speculation.
