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HCM City probes forex practices among banks   2011-02-22 - VNS

The HCM City People's Committee has set up a team to investigate if banks have been selling US dollars at above the official selling rate by charging "fees."


Following complaints from businesses, the State Bank of Viet Nam's HCM City office discovered that two banks were guilty of this practice, Tuoi Tre (Youth) newspaper quoted its deputy head Nguyen Hoang Minh as saying yesterday.


They have been asked to report the cases to the central bank, he said, but declined to reveal their identities.


The businesses said the banks had demanded more than VND600 per dollar above the official rate on Thursday.


The director of a printing company told Tuoi Tre on condition of anonymity that his company imported paper worth US$1 million a month and the premium meant they had to pay an extra VND600 million ($30,000).


This has led to an increase in the prices of their products, he said.


The dollar was sold at VND22,050 on the black market on Thursday and bought at VND21,900-21,950.


On the same day the central bank's reference rate was VND10 down from last week at VND20,683 per dollar. Banks are allowed to trade the greenback at up to 1 per cent on either side of the daily reference rate.


But they said they could not buy dollars from businesses at these prices. Tuoi Tre said the State Bank of Viet Nam's move to hike the dollar interest rate has confused exporters who continued to hoard dollars.


To ease the pressure on the dong, the State Bank not only has to adopt measures to regulate foreign currency trading but also disseminate accurate information and address public sentiments.


The devaluation of the dong last week was aimed at bringing the official and black market rates closer and narrow the widening trade deficit.


But market happenings have left the public concerned about the weakening dong so that people are buying dollars and gold as safe havens.


Central bank governor Nguyen Van Giau, hoping to boost public confidence, told Tuoi Tre yesterday that the market would be stabilised.


The 9.3 per cent devaluation of the dong was supported by the market since it met expectations.


It's not surprising that public sentiment was gloomy immediately after the devaluation but it would improve, he assured.

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