Two new policies on foreign exchange management by the State Bank of Vietnam (SBV), issued last week, have helped the local currency, the Vietnamese dong, partially regain some of its value against the U.S. dollar after depreciating by five percent. The SBV, the country’s central bank, released a circular to tighten rules on the trade of foreign currencies in order to bolster its anti-dollarization effort on Friday last week. According to Circular 15, taking effect on Monday, when conducting foreign exchange transactions with banks, businesses and individuals are required to present papers and documents proving the purpose of the transactions and the amount and timing of the payments. Those papers and documents are a must for banks to sell foreign currencies for immediate delivery. The regulation is the next step of the central bank’s effort to reduce foreign currency hoarding, part of the SBV’s anti-dollarization scheme. On September 28, the SBV cut U.S. … [Read more...] about Vietnamese dong strengthens following cbank’s new rules on forex management
Vietnamese dong value increase
VietNamNet Bridge – Economists from Hanoi National University have urged the government to adjust the dong/dollar exchange rate, while the National Finance Supervision Council said stabilizing the exchange rate is a top priority. The Vietnam Center for Economic and Policy Research (VEPR), an arm of Hanoi National University, in its Q4 2014 report, suggested devaluing the local currency. VEPR’s experts said Vietnam’s dong-pegged-to-dollar exchange rate policy led to over-valuation of the dong over many years when inflation rates were relatively high. This put domestically made and export goods at a disadvantage compared with imports. The disadvantage became even more serious in the second half of 2014, when the US dollar appreciated against many other hard currencies. The stronger dollar then led to appreciation of the dong, and made imports cheaper. Some financial institutions suggested devaluing the local currency to protect the competitiveness of … [Read more...] about Is it time to devalue the Vietnamese dong to boost exports?
VietNamNet Bridge – The State Bank of Vietnam (SBV) has sold dollars to commercial banks in an effort to stabilize the dong/dollar exchange rate amid the year-end dollar demand increase. The dollar sale has been confirmed by a high ranking official of the bank. The official declined to reveal the amount of dollars sold, but said SBV only sold dollars to commercial banks which reported a negative foreign currency position. The banks with positive foreign currency position were not eligible for buying dollars from the central bank. Thoi bao Kinh Te Sai Gon has quoted the deputy general director of a HCM City-based bank as saying that the sale started in early December, estimating that about $1.5 billion has been sold so far. The banker confirmed that the central bank sold dollars at VDN21,400 per dollar, or VND60 per dollar lower than the ceiling price. The ceiling price is understood as the highest possible price level at which commercial banks can sell to clients. The … [Read more...] about State Bank sold $1.5 billion to stabilize dong value
Listed stock prices have increased more than 32% only after one month. 36 stocks and fund certificate all up including one which rise astonishingly 62%. Investors are currently enthusiastic with the fascinating growth of the market. At the beginning of March, only after two trading sessions VN-Index jumped 22.17 points, extending an unforgetable month for investors. At the end of March 2nd trading sessions, VN-Index went over 410, closed at 412.82, an increase of 43.89 points (11.9%) compared to that of the week before and 100.5 points (32.1%) more than that of before Lunar New Year (Jan 27th). The total trading volume reached VND 65.7 billion per session, the highest ever of Ho Chi Minh City Securities Trading Center in more than 5 years. What are the reasons behind this remarkable boom? First, it is because of the performance of listed companies. 2005 was a pretty successful year for these companies as the average annual growth was over 20%, dividends were paid as planned. … [Read more...] about What Behind Stock Value Increases
Due to concerns about a possible year-end dollar drought, and rumors about expanding the exchange rate between the Vietnamese dong the dollar, the unofficial exchange rate rose sharply this week. Meanwhile, firms find it hard to buy dollars at prices fixed by the State Bank of Vietnam. The dollar rose as high as VND20,020 at gold shops in Hanoi on Wednesday, compared to 19,900-19,980 on Monday. Meanwhile, commercial banks were selling dollars at 19,400- 19,500. Economist Ngo Tri Long, former deputy head of the Market and Price Research Institute, gold prices have affected the exchange rate. "With the high price of gold, some people have accumulated dollars to smuggle gold, and then resell it on the domestic market at a profit," Long said. The domestic price of gold rose to VND33.09 million per tael on Thursday morning, compared to VND32.97 million on Wednesday, according to SJC, the country's top gold trader. The dollar price also increased as businesses scrambled to … [Read more...] about Dollar dearth dampens Vietnamese dong