Dollar appreciates, but exchange rate may not be adjusted in first half of year
Dollar appreciates, but exchange rate may not be adjusted in first half of year
The dollar price has been appreciating against the Vietnam dong like other currencies but analysts believe the State Bank will not adjust the dong/dollar exchange in the first half of the year.
The black market dollar price began rising many days ago, though the commercial banks’ quoted prices remained stable.
The dollar price, according to Thoi Bao Kinh Te Sai Gon, on March 9 climbed to a higher level than the official ceiling rate at VND21,672 per dollar.
The gold shops in district 1, HCM City on the day offered to buy the dollar at VND21,660 per dollar, while setting the sale price at VND21,690-21,700 per dollar
The owner of a gold shop confirmed that the dollar price is on the rise.
Prior to that, when the black market resumed its operation after the long Tet holiday, the dollar was sold at VND21,500 per dollar only.
However, state-owned commercial banks have also begun adjusting their prices.
On March 13, state-owned Vietcombank, VietinBank and BIDV raised the buying and selling prices by VND5-10 per dollar to VND21,340-21,390 per dollar.
Military Bank, which kept the dollar prices at a low level over the last month at VND21,280 per dollar, also unexpectedly raised the quoted price to VND21,380 per dollar, offering the most competitive buy price in the market.
Analysts noted that the dollar moving upward was foreseeable, as the dollar has appreciated against most key currencies. The dollar has for the first time in the last 12 years climbed to 1 euro per dollar.
The US dollar appreciation was described as inevitable as the economy has recovered with the unemployment rate at a 6-year low.
Vo Tri Thanh, deputy head of CIEM, said the better US economy would make the US investment environment more attractive, resulting in more capital flow.
This would lead to a higher demand for the dollar, pushing up the price further.
However, Vietcombank Securities Company (VCBS), in its latest report, predicted that the official dong/dollar exchange rate would not be adjusted in the first half of 2015.
The demand for the greenback has decreased after reaching a peak in late 2014. Meanwhile, the demand for Vietnam dong is increasing.
VCBS noted that the expected low inflation rate this year and the high possibility that the US Federal Reserve will not raise the prime interest rate soon in the first half of the year will help ease pressure on the dong.
The dollar supply is expected to stay abundant as Vietnam has seen an excess of exports over imports in the last two months.
In January 2015, SBV weakened the Vietnamese dong by 1 per cent, raising the dong/dollar daily reference rate from VND21,246 to VND21,458.
Binh stressed at a conference earlier this year that one of the sector's targets this year was maintaining the stability of the foreign exchange market and keeping rate fluctuation below 2 percent, though he added this would not be easy.
