The State Bank of Vietnam (SBV)’s decision to widen the dong and US dollar exchange rate limit is applauded by commercial banks. However, experts say the move is a short-term bonus that doesn’t solve the long-term problem – the superfluous dollar.
On December 24, the governor of SBV decided to expand the dong and US dollar exchange rate margin to +/-0.75% from +/-0.5% (the exchange rates applied by commercial banks can be 0.75% higher or lower than the central bank’s daily rate announcement).
The decision was made after the central bank was criticized heavily for idly watching as commercial banks suffered the consequences of the dollar excess. Over the last several months, regulations restricted commercial banks from quoting the dollar below 0.5% of the price announced by the SBV.
On December 25, one day after the central bank’s decision was issued, exchange rates offered by Eximbank were 16,018 dong per US dollar, 16,030 dong per US dollar and 16,040 dong per US dollar for purchasing dollars in cash, purchasing via bank account and selling dollars, respectively.