VietNamNet Bridge - The dollar price has been increasing for a month, while the official dong/dollar exchange rate remains unchanged as the State Bank has committed not to devalue the dong by more than 2 percent in 2015.

 

The dollar price on the black market reached the VND21,800 per dollar threshold, while it hit the ceiling level in the official market. Vietcombank quoted dollar prices at 21,570 – 21,630 per dollar every day last week.

Observers noted that though the State Bank attributed the dollar price increase to people’s fear about the exchange rate adjustment, people were still keeping dollars in their coffers and waiting for a decision by the watchdog agency to devalued the dong.

A banker confirmed that the businesses’ concern that the dollar price may escalate in the time to come is the reason why businesses do not want to sell dollars at this moment. 

Meanwhile, the businesses, which have borrowed money in dollar before, now are rushing to buy dollars to pay debts.

“I’m sure the dollar supply and demand is still in balance and is stable,” he said, adding that the dollar price is fluctuating these days because of people’s worries.

Experts estimated that if the dong loses 2 percent of its value every year, the interest rates would increase by 0.6-0.8 percent. If the dong loses 3 percent of its value, the interest rate would increase by 1-1.2 percent per annum.

Nguyen Tri Hieu, a banking expert, said that the dollar price fluctuations in the interbank and black markets were caused by speculation. Speculators are trying to keep dollars right now, hoping to sell dollars later when the prices go up as predicted.

Hieu noted the State Bank seems to “expect a miracle to happen”.

The State Bank is trying to retain its prestige by refusing to adjust the dong/dollar exchange rate. The watchdog agency earlier this year stated that the dong will not be devalued by more than two percent this year. Meanwhile, the State Bank has devalued the dong by one percent.

“The State Bank wants to keep its promise on not devaluing the dong by more than 2 percent,” Hieu noted. 

“It wants to be consistent with the exchange rate policy, but the world has been changing so much,” he said. 

If the dollar continues appreciating in the world market, thus causing negative influences on exports, the central bank would need to adjust the exchange rate.

Agreeing with Hieu, an expert said though the stable exchange rate policy would help businesses draw up their business plans, the State Bank should not “tie” itself to the 2-percent stake, and instead should make decisions based on the real situation.

Thanh Mai