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Re: RICK C post# 1045

Saturday, 05/10/2008 9:10:18 AM

Saturday, May 10, 2008 9:10:18 AM

Post# of 1139
Imports drive US dollar over dong

(09-05-2008)

HA NOI — The US dollar has continued to stren-gthen against the dong.

An increase in demand for imports is blamed for the rise.

Vietcombank’s listed USD/VND exchange rate was 16,130/16,147, the highest for the year on Wednesday with the interbank rate at VND15,987.

It meant a selling price in the upper range of the +/-1 per cent trading band.

Bank rates listed yesterday were up about 0.76 per cent against early this year and about 0.11 per cent against Friday, May 2.

The dollar supply is always limited from April to August every year when demand is strong due to imports," a treasury officer at a big Ha Noi commercial bank told Viet Nam News yesterday.

"But it’s just the beginning of the year and we really lack dollars. The shortfall is becoming critical," he said.

Other banks reported a similar shortage and said the number of their borrowers was falling except for importers; customers who have to make due international payments and investors in the international market.

A reliable source told Viet Nam News that interest of 15 per cent for very short-term loans was being charged to limit dollar lending.

Not as good as gold

The State Bank of Viet Nam’s decision to allow gold dealers and banks to import an extra 3.5 tonnes of the precious metal this year has also been blamed for the strong dollar demand.

The shortage of greenbacks is even obvious in the open market where the currency traded at VND16,400 yesterday.

"People rushed to buy the US dollar today," said Ha Noi-based Bao Tin Minh Chau Jewellery Co senior dealer Nguyen Huu Dang.

"Very few came here to sell.

"It’s ‘hottest’ trading day since the beginning of this year and I think the trend will continue because the US dollar has gained against the euro in the international market."

The State Bank of Viet Nam confirmed last month that it would keep selling the greenback to commercial banks to support for their liquidity and to stabilise the money market.

Now the central bank does not seem to have anticipated the extent of the rise in the dollar against the dong. — VNS


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