Dong weakens on fluctuations in gold market
HCM CITY — The dong-US dollar exchange rate applied by banks has settled at the higher end of the 3 per cent daily band fixed by the central bank during the last week.
The development is partly attributed to strong fluctuations in the domestic gold market.
In the first week of August, the exchange rate at most commercial banks remained below the permitted ceiling, with the difference between selling and buying prices standing at around VND80.
On August 10, Vietcombank bought the greenback for VND20,735 and sold it at VND20,815.
The margin narrowed significantly to less than VND10 after August 11, when gold trading companies were allowed by the State Bank of Viet Nam to import five tonnes of the precious metal.
On the morning of Wednesday, the central bank announced that the average forex rate on the inter-bank market had increased by VND10 per dollar. The change contributed to making the forex rates at commercial banks hotter, and the margin narrowed further.
Vietcombank's buying and selling prices of the US dollar were VND20,830 and VND20,834, respectively, on August 24, a margin of just VND4.
The Asia Commercial Bank (ACB), the Bank for Investment and Development of Viet Nam (BIDV) and Eximbank also raised their forex rates by VND10 higher than the day earlier.
In the open market, the forex rate has also climbed to VND21,000 or more per US dollar.
Independent economists attribute the increase in the forex rate to rapidly increasing demand for the greenback to import large volumes of gold after domestic gold prices soared to nearly VND49 million per tael.
The rapid growth of dollar loans over the last eight months has also made the forex rate soar, especially when the nation's trade deficit is expected to rise further and overseas remittances to drop.
In addition, many old dollar loans had become due and importers would need large volumes of the greenback to import commodities for the year-end shopping season. This situation had exerted strong pressures on the forex rate, experts said. — VNS