VietNamNet Bridge - The dollar prices quoted by commercial banks are approaching the ceiling level. Sources says the State Bank of Vietnam (SBV) will release a “strong message” on the exchange rate policy.

The dollar prices on March 24 in the bank-to-business market were dozens of dong below the ceiling level set by central bank, hovering VND21,570-21,590 per dollar, up by VND10-60 per dollar over the day before.

Vietcombank, which is considered the biggest foreign currency trader, quoted the dollar price at VND21,575 per dollar, up by VND25 per dollar. Techcombank offered the highest price, at VND21,590 per dollar, just VND82 lower than the limit VND21,672 per dollar.

Experts say the pressure on the dong/dollar exchange rate is getting stronger. The dollar demand is increasing as foreign-invested enterprises at this time want to collect dollars to transmit their profit abroad. Meanwhile, the public and speculators are keeping the dollar due to the rumors about dong devaluation.

In fact, they have every reason to think the dong/dollar exchange rate would be adjusted. The sharp greenback appreciation has forced some governments to devalue their local currencies. The moves have made Vietnam’s exports less competitive in the world market. 

The Rong Viet Securities Company, in its latest report, also pointed out that the factors supporting the dollar appreciation are now very strong. 

The news about Indonesia which is facing big challenge in trade balance when following the exchange rate stabilization policy in the context of low foreign exchange reserves could be a reason to affect foreign investors’ decision.

In theory, foreign investors would sell their portfolios to get dollars and delay the disbursement when they see the possibility about local currency depreciation.

Some analysts have urged the State Bank to devalue the dong by one percent at least to support Vietnam’s exports. Meanwhile, others believe that it would be better to pursue a stable exchange policy.

Vu Dinh Anh, a renowned finance expert, thinks that it is not the right time to lay down policies, saying that it is necessary to keep a close watch over the exchange rate performance for more time. The central bank has not replied.

The bank’s silence, in the eyes of a banking expert, is a “clear answer”. He said the exchange rates quoted by commercial banks do not exceed the ceiling level. The gaps between the buy and sell prices remain big, at VND90-100 per dollar, which means that the dollar supply is not as short as thought.

Thoi Bao Kinh Te Viet Nam quoted an SBV official as saying that the central bank will give a “strong message” on the exchange rate policy within days.

Bao Lam