Selling dollars to essential-product importers only, says SBV

A cash teller at the HCMC-based ACB Bank poses piles of dollars. (Photo by Minh Tri)

Surge in the foreign exchange rate of Vietnam dong and US dollar on the so-called black market was halted after the State Bank of Vietnam announced it would sell dollars to the market.

The Vietnam dong is VND21,260 per dollar on 22^nd November on the so-called black market, edging up VND260 in the last two weeks.

Despite the central bank’s announcement, local businesses said they struggled to buy the greenbacks from local banks.

They explained that they had to exchange the greenback on the so-called black market at the rate of VND20,500-21,260 per dollar, VND500-1,400 higher than local lenders’ announced rate.

Central bank Vice Governor Tran Minh Tuan promised that the state bank will continue to sell dollars to local importers trading essential products, mainly in medicine, steel and sugar, until year end in accordance with the government’s instructions.

The state lender sold $300 million to the market in the first two weeks this month and will continue to sell more, Mr. Tuan said. “The government’s had to use dollars from inward remittance and foreign investments to fill up the trade deficit for many years. Therefore, exporters should also support the domestic greenback supply by selling back dollar to local lenders,” the vice governor said.

Mr. Tuan also said that the central bank supervises the dollar selling at local lenders by setting up supervisory teams.

The State Bank of Vietnam’s Ho Chi Minh City branch last week helped 14 importers trading essential productions to get loans with preferential interest rates.

However, some commercial banks still shunned the central bank’s regulation, selling dollars to some importers to trade luxury cell phones, cosmetics and even some agriculture products that can be produced in local market, according to Ho Huu Hanh, director of the central bank’s Ho Chi Minh City.

“It’s hard to find out good clients during tough times. Therefore, we hardly turn down a dollar buying requirement from big clients, who want to import non-essential products,” a director of a local lender, who asked not to be named, said.

“On the other hand, we also hesitate to sell dollars to importers trading essential products as we don’t know much about the company’s business status,” he added.