VietNamNet Bridge – Dr Tran Du Lich, a well known economist, former Head of the HCM City Economics Institute, when talking about the current dollar scorching hot market, said that in the immediate future, the State Bank should keep a sound mind and not adjust foreign exchange rate in accordance with the dollar price on the black market. Lich said the wise move now would be to let the market adjust itself.

What would you say about the current gold and dollar prices?

The gold and dollar prices have been fluctuating heavily. This should be seen as the result of the prolonged global financial crisis which causes the changes in the reserves of the central banks around the world, and influences the health of the US dollar.

Meanwhile, the forex management mechanism in Vietnam has been suffering from many shortcomings for a long time already. In order to attract foreign currencies, we have been applying a loose policy on forex management. For example, in Vietnam, everyone can deposit foreign currencies at banks, without having to prove thetheir origin. This is unacceptable in any other country.

Now many agencies who collect foreign currencies for commercial banks have become foreign currency trading shops, thus creating the black market.

Let’s look atour neighbors’ countries. They prohibit the use of the dollar on bank holidays. As banks do not open on then, you will not be able to convert money or  buy anything.

People have been talking a lot about the big impacts of the black market for  foreign currency, believing that the performance in the market has big impacts on the official market. People also have been talking about the price quotations being given in dollar instead of the Vietnam dong.

What is the right monetary policy in the current circumstances?

I think that the central bank should not be influenced by the situation on the black market. Let the market adjust itself.

The State Bank should focus on providing foreign currencies for the import of essential goods. The information should be made public, so that enterprises do not have to seek foreign currencies on the black market. Meanwhile, the enterprises which import luxury items will have to seek foreign currencies themselves. Such a policy will help ease the pressure on the foreign currency supply.

Besides, we have to apply drastic measures to stop illegal foreign currency trading. Like other countries, we should make official announcement that we will clear away the black market.

We also need to require that people  show the origin of their money when depositing at banks. This will bring many benefits. Especially, it can help fight corruption.

If we panic and intervene into the market, this may turn out counter-effective and encourage speculations.

However, most enterprises still complain that they have to buy dollars on the black market, because they cannot buy dollars from banks?

Yes, this is true. Therefore, I said that the Government needs to promise to provide dollars to enterprises so they can import  essential goods. Of course, the state should cooperate with enterprises: big export companies will be required to sell foreign currencies to banks.

Cao Nhat