VietNamNet Bridge - Banks and businesses have begun selling dollars after an urgent meeting with the State Bank of Vietnam (SBV) which affirmed that it would not adjust the dong/dollar exchange rate until the end of the year, and it would sell dollars to intervene in the market when necessary.

 

A local newspaper some days ago quoted a businessman as saying that he would try to buy dollars for early debt repayment because he anticipated the dollar price would rise.   

There have been more dollar buyers than sellers in the market since the day the central bank widened the forex trading band twice to 3 percent and devalued the dong by one percent.

Bizlive some days ago quoted Nguyen Thanh Toai, deputy general director of ACB, as saying that commercial banks rushed to buy dollars for fear that the dollar price would increase further, while they were very cautious when selling dollars to businesses.

The news website quoted a banker as saying that most of Vietnamese businesses bought foreign currencies under spot, not forward, contracts, which caused temporary dollar supply tension.

Nguyen Hoang Minh, deputy director of the HCM City branch of the State Bank, confirmed that some local banks bought more dollars than they sold some days ago. 

However, he said many import companies still sell dollars to banks, therefore, banks absolutely have enough dollars to satisfy businesses’ demand.

Sources said that SBV’s Governor Nguyen Van Binh at the meeting once again affirmed the SBV’s forex stabilization policy and requested banks to stop hoarding dollars for speculation.

VietinBank’s CEO Le Duc Tho said on national television channel VTV that foreign currency transactions on August 26 had returned to a normal track, while transaction prices were lower than the ceiling level.

“The Governor of the State Bank has made a strong commitment not to continue adjusting the exchange rate until the year end. The market liquidity is now very good,” Tho said.

Pham Thanh Ha, deputy CEO of Vietcombank, also said the dollar price is ‘stable’ and it is below the ceiling price level.

Meanwhile, Phan Thanh Son, a senior executive of Techcombank, noted that the central bank’s clear message on the exchange-rate management policy has encouraged banks and businesses to resume normal operation.

“Banks and businesses are not worried about dollar price increase and they don’t try to hoard dollars anymore. This improves the sale and purchase value,” Son said.

Nguoi Lao Dong, quoting some experts, has warned that the investors who buy dollars at this moment may face high risks as the central bank has promised to sell dollars to the banks with the foreign currency position at minus (-) 5 percent and lower.

Kim Chi