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Dollar prices equal on official and black markets   2010-10-19 - VNR 500, Tuoi tre

As anticipated, the dollar has become scarcer towards the end of the year. Now the dollar prices at which commercial banks sell to businesses have become nearly the same as the prices on the black market.

 

 

 

A lot of businesses complain that they cannot buy dollars at this moment because the supply has become so short.

ND, the owner of a famous jewellery company in HCM City, said she needs one million dollar now to import materials to produce jewellery products for the Tet sale season. The dollar price quoted by the bank is 19,500 dong per dollar, but in fact, ND was told that she will have to pay 19,900 dong per dollar, while the gap of 400 dong per dollar will be calculated as the “service fee” ND has to pay to the bank.

According to her, with such a high price of the dollar, her company will have to consider raising the sale prices of jewellery products. “We now can only import materials for immediate production, while we dare not import materials to store for the whole quarter as previously. The production plan has been rescheduled weekly instead of every month of each quarter as previously,” she said.

B, Finance Director of an animal feed production company, said that previously, buyers also had to pay “service fee” to the banks which sold dollars, but the fee was acceptable, just tens dong per dollar. However, things have become different now.

“Banks told us that the dollar supply is now very scarce and that we have to wait if we want to buy dollars at the prices officially quoted by the banks. If we want dollars right now, we will have to pay additional fees which make the dollars prices nearly equal with the prices on the black market,” B said.

The owner of a paper import company has calculated that he has lost 2.8 billion dong for the 7000 tons of printing paper he imported in October. He said that at the time of signing the contract, the dollar price was 19,500 dong per dollar. Now, when he has to make payment for the import deal, the dollar price has soared to 19,850-19,900 dong. “We know for sure that we will incur losses with the import consignment,” he complained.

Meanwhile, commercial banks explain that they cannot sell dollars to businesses at the quoted prices.

Under the current regulations, the dollar prices at which commercial banks sell to businesses cannot exceed three percent above the official exchange rate announced daily by the State Bank of Vietnam. Therefore, commercial banks have to quote the dollar prices at the lower levels than the actual sale prices.

A senior executive of a big bank said that his bank can only earn a modest profit of 5-10 dong per every dollar sold, because they have to buy dollars at high prices from export companies, nearly the same with the prices on the black market.

Since the dollar supply has become scarce, banks have to “dodge the laws” to sell dollars at the prices higher than the quoted prices in order to make profit.

Meanwhile, Nguyen Hoang Minh, Deputy Director of the HCM City Branch of the State Bank of Vietnam, has threatened to impose heavy fines on the banks which sell dollars at the prices higher than the quoted prices. He stressed that the behaviour violates the Foreign Exchange Ordinance.

* Most enterprises say with the current new exchange rates, they have to raise sale prices to ensure profit. ND said the dollar price increase has made the production costs increase by 10-15 percent.

* Since October 15, gold traders have not sold gold any more, thus pushing the prices high up. On October 16, the world’s gold price decreased by $13 per ounce (290,000 dong per tael), while the domestic price decreased by 60,000 dong only. The sale price remains very high at 33.15 million dong per tael.

Nguyen Thi Cuc, Deputy General Director of Phu Nhuan Jewellery Company said people buy gold at this moment because they fear the dollar price will increase, while gold holders do not sell gold. Rumour has it that the State Bank of Vietnam would devalue the Vietnam dong further.

 



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