Vietnam News Network

Vietnam News: Local, National, Business, Sport, Entertainment and Technology

Trade BCHUSD, Bitcoin and Cryptocurrencies

BUY & SELL BCHUSD | View BCHUSD News & Updates


Buy Sell BCHUSD, Bitcoin and Cryptocurrencies

Dollar supply now more profuse   2010-03-29 - VietNamNet/Tuoi tre

After a period of stability at high levels, the dollar price on the black market and the bank-to-business market has decreased thanks to a profuse supply.

 

 

 

Dollar price slide

 

On March 26, Eximbank quoted the dollar price at 19,098 dong per dollar after a period of maintaining the price at the ceiling of 19,100 dong. Other banks still quoted the dollar price at 19,100 dong, but slashed purchase prices significantly by 30-60 dong per dollar. Vietcombank, for example, quoted the purchase price at 19,050 dong per dollar, Vietinbank and ACB at 19,060 dong, Sacombank 18,990 dong.

 

A senior executive banker remarked that the dollar supply has become more profuse recently, after a long period of serious shortages. The dollar price, therefore, will tend to decrease. Once banks can provide enough dollars to businesses, the price on the black market will also decrease.

 

The gap between dollar prices quoted by commercial banks and the black market price has narrowed 180 dong per dollar instead of 500 or 1000 dong per dollar as seen previously.

 

With an increasing dollar supply and decreasing price, businesses now do not want to store dollars any more. In the first quarter of 2010, banks in HCM City reportedly purchased 12.3 billion dollars and sold 12.2 billion.

 

Under current regulations, the interest rate that banks pay to businesses’ deposits is now one percent per annum. Meanwhile, the dong interest rate at which banks lend to businesses is 15 percent per annum. The gap of 14 percent per annum is high enough to make businesses sell dollars for dong.

 

Export companies now prefer borrowing in dollars to enjoy the lower interest rate. Currently, the dollar interest rate is lower by 10-12 percent per annum than the dong interest rate.

 

Dong interest rate higher by 3.5 times dollar rate

 

The general director of a joint-stock bank believes that the deposit interest rate in dollars will now decrease. The dollar in the US is now below one percent per annum, while it is 4 percent per annum in Vietnam, which means that the dollar interest rate in Vietnam should decrease even further.

 

With the dollar interest rate lower than the dong by 5-7 percent per annum, people will not speculate in dollars any more.

 

Financial analysts calculate that deposits made in dong will profit 3.5 times more than depositing in dollars. For example, if someone has $10,000 and deposits them at banks at the interest rate of 3 percent per annum, he will get $25 in interest a month, or 480,000 dong. If he sells the $10,000 for dong, he will get 191 million dong. When 191 million dong is deposited at the interest rate of 10.49 percent per annum, he will get the interest of 1.7 million dong a month.

 

The domestic gold price is coming closer to the world price, one factor in the dollar’s stabilization. If people do not collect dollars on the black market to import gold illegally, the dollar price could remain stable.

 

In related news, Vietnam’s trade deficit in the first quarter of 2010 was $3.6 billion. Other sources of dollars can offset the deficit, including kieu hoi (overseas remittances).



Other news

BUSINESS IN BRIEF 29/3   2010-03-29

Gas, steel prices escalating   2010-03-29

Handicraft producers kept busy, happy   2010-03-29

What’s next after gold exchanges close?   2010-03-29

Investors ignore positive signs   2010-03-29

Ministry seeks further extensions for equitisations   2010-03-29

Singapore’s franchises eye Viet Nam   2010-03-29

Footwear exports exceed 1 billion USD in first quarter   2010-03-29

HCM City’s economy growing well   2010-03-29

3G services reel in mobile subscribers   2010-03-29

iPhone sales flatter to deceive on opening day   2010-03-29

BUSINESS IN BRIEF 28/3   2010-03-28

India urged to invest in VN agriculture   2010-03-28

Prices of essentials to be stabilised   2010-03-28