Bank denies new rumours of devaluation

The statement was made to the public in an effort to ease speculative rumours that the Vietnamese dong might be further devalued – rumours which had driven the black market price for a US dollar yesterday to VND20,030-20,050, up VND150 over Monday's rate.

On the non-deliverable forward (NDF) market – a currency futures market – the US dollar yesterday was expected to rise to VND19,948.99 by next month, VND20,279 in three months, VND20,749.540 in six months and VND21,520.76 by October of next year.

Rumours had also begun circulating that the interbank rate – the rate at which banks trade currencies amongst themselves – had already risen as high as VND19,870-19,990 per dollar, although the official rate set by the central bank remained at VND18,932 per dollar.

Commercial banks were meanwhile quoting nominal sell prices of VND19,500 per dollar, while black market forex dealers were reporting a spike in individuals buying dollars.

The deputy head of the State Bank's Ho Chi Minh City branch, Nguyen Hoang Minh, said that the central bank has worked with relevant agencies to establish hot lines to monitor the forex market and stamp out speculative business practices.

The State Bank also reaffirmed that it would penalise banks that sell the dollar at prices higher than the official ceiling rate.

But, Minh noted, the Ho Chi Minh City branch has not yet calculated practical demand for the dollar in October, and that market inspections were difficult because of limited human resources.

A senior central bank official who asked to remain anonymous commented, "The sudden appreciation of the greenback has resulted from rising global gold prices and dollar accommodation. Some enterprises which have revenue in US dollars are also keeping the dollars in accounts and not selling them back to the banks.

"However, there is a positive balance in the dollar supply in the banking system of $250-300 million."