VietNam-News

Dollar price hits highest peak in six months
13:58' 05/06/2007 (GMT+7)

VietNamNet Bridge – The Vietnam Bank for Foreign Trade (Vietcombank) on June 4 announced the exchange rate at VND16,096/US$1, the highest peak in the last six months. Experts said that the rate would see further adjustment as the demand is increasing.

Earlier last week, the rates announced by Vietcombank were VND16,065/US$1 (purchasing) and VND16,075/US$1 (selling). One day later, the figures rose to VND16,055 and VND16,080 respectively. On June 4, the greenback was sold at VND16,096/IUS$1, the highest peak over the last six months.

Experts said that the greenback has been revaluating, though very slowly. On the black market, one dollar is now exchanged for VND16,020.

The situation proves to be quite different from what was seen late last year. After reaching the VND16,100/US$1 level on November 17, the greenback devaluated gradually, bottoming at VND16,000/US$1 on February 9, 2007. However, the greenback price has bounced back again on March 2, when the exchange rate reached VND16,001/US$1 and the greenback value has been continuously increasing since then. In the last week alone, a dollar increased by VND20 in value.

Hoang Danh Chinh, the owner of the Kim Dung Gold Shop on Le Loi street in district 1, HCM City, said that though the dollar price increases, the demand for dollar does not increase accordingly. He said that every day, his shop exchanges several thousand dollars for clients. Eximbank has also reported the same situation: some $400-500 are exchanged every day.

Meanwhile, Nguyen Phuoc Thanh, Director of Vietcombank HCM City Branch has attributed the dollar price increase to the sharp increase in the demand. As the gold price in the domestic market keeps rising, gold importers try to collect more dollars to import gold. He said that the demand for dollars reaches $10mil some day.

“The supply of dollars has become more tight when the State Bank of Vietnam decides to buy dollars in for the national reserve fund, which has made the demand for dollars increase dramatically,” said Mr Thanh.

Vu Duc Hai from Eximbank said that the continued increase of the dollar value is the periodic recovery of the currency. Importers need more dollars at this moment, while foreign funds tend to sell shares to get dollars back. These factors all have led to the scarcity of the greenbacks.

Experts said that it is very likely to see the greenback value increase further as Vietnam needs to encourage exports, especially when it has joined WTO.

Mr Thanh from Vietcombank has forecast that the dollar supply and demand will balance in the coming time. The investors, who find it unprofitable to keep dollars, will sell dollars. The greenback will revaluate, but there would not be big changes and dramatic increases as the exchange rate is being put under the control of the central bank.

(Source: VNE)