Dollar/dong exchange rate cools down

Commercial banks on Thursday weakened the US dollar against the dong.-Photo antt

Vietcombank listed the dollar at VND23,140 for buying and VND23,220 for selling, down VND80 against Tuesday.

The buying and selling rates at BIDV on Thursday also slid by VND20 against Wednesday to VND23,130 and VND23,210, respectively.

VietinBank also weakened the dollar by VND18 against Wednesday to VND23,140 for buying and VND23,220 for selling.

DongABank quoted the rates of VND23,130 and VND23,220, down VND80 against Wednesday.

Eximbank’s and ACB’s selling rates both declined by VND20 to VND23, 210.

The same move was also seen on the unofficial market with the dollar traded at VND23,330 and VND23,360 for buying and selling, down VND90 against Tuesday.

On Thursday, the State Bank of Viet Nam (SBV) set the daily reference exchange rate at VND22,649 per dollar, down VND5 from the previous day.

With the current trading band of +/- 3 per cent, the ceiling rate applied to commercial banks during the day was VND23,328 per dollar and the floor rate VND21,970.

Early this week, commercial banks appreciated the dollar sharply against the dong after SBV stopped selling the dollar cheaply to commercial banks to stabilise the exchange rate in the domestic market.

Analysts from Bao Viet Securities Company said that commercial banks’ increases in the dollar price in tandem with that of the SBV were more of an instant psychological response than an impact from the actual supply/demand balance on the market.

Experts also said that it was not an advantage for dollar holders.

Banking expert Nguyen Tri Hieu explained that the gap between interest rates of the dong and the dollar remained high. The rate for dollar deposits was zero per cent while the rate for the dong was 7-8 per cent per year.

If the dollar appreciated by 1-2 per cent this year, dollar holders would still make less profit than depositing dong in local banks, Hieu added.