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Greenback, gold prices soar as China devalues

Update: August, 14/2015 - 08:20

More buyers seek gold as the prices soar in Viet Nam on August 12. Each tael of the State-owned SJC gold was listed at VND33.72 million (US$1,528) — Photo baohaiquan.vn

HA NOI (VNS) — The greenback rates soared in the flea market and touched a new ceiling price in commercial banks yesterday as China devalued its currency for the third time in three days.

Yesterday, most money exchangers on Ha Trung Street, one of the most popular spots for money exchange in Ha Noi, sold a US dollar for a sum between VND22,200 and VND22,300, as much as 100-200 dong higher than the ceiling price.

The Technological Commercial Bank (Tech-combank) and Asia Commercial Bank (ACB) rated US dollar at the ceiling pieces of VND22,106 while the DongABank, VietinBank, Vietcombank and BIDV listed their selling prices at VND22,105, one dong lower.

A day earlier, the State Bank of Viet Nam (SBV) lifted the margin of the fixed rate for the greenback from 1 per cent to 2 per cent. The dong's fix, or the inter-bank exchange rate, remains unchanged at VND21,673 per US dollar while the ceiling rate was VND22,106 per dollar.

The judgment came as China devalued reference rate of yuan by 1.9 per cent on August 11, and again by 1.62 per cent on August 12 and another 1.1 per cent yesterday.

Nguyen Thi Hong, Deputy Governor of SBV said on the bank website that the adjustment was to deal with the negative impact in the global market caused many unexpected factors including the sudden devaluation of the Chinese yuan in the last two decades. She confirmed the bank would maintain a close supervision in the forex market for a possible intervention.

Gold prices climbed too. Gold prices rallied another VND1.08 million ($48.8) per tael in the market from yesterday rates. Each tael of the State-owned SJC gold was listed at VND34.8 million ($1,574).

A representative from Phu Nhuan Jewellery JSC said the price rise was mostly caused by the Chinese devaluation and the local central bank's wider margin of the greenback. He added that the company did not see an increasing demand for gold within the day.

On the global gold trading floor, kitco.com, one ounce of gold was traded at $1,117.40 per ounce or $1,346 per tael.

On the same day, reuters.com reported that gold edged higher, supported by the retreating US dollar and a tumble in global equities as traders awaited US employment data, seen as the key to determine when the Federal Reserve may hike interest rate.

Thus, the gap between local gold prices and the international prices was $228 yesterday. — VNS

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