Dollar supply expected stabilise
08-AUG-2008 Intellasia | Tuoi Tre
Aug 8, 2008 - 7:00:00 AM
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Vietnamese banks' US dollar selling price yesterday was down another 100 dong, particularly that of Vietcombank HCM City arm and Eximbank was listed at 16,620 dong/US dollar.
The US dollar price of the free market also now is closer to banks' level that fell by 160 dong/US dollar as compared with this early month and down nearly 230 dong/US dollar from the start of July.
There are two signals showing the shortness of breath of US dollar market are that US dollar price is declining gradually and banks do not use entire allowable 2% amplitude as defining their own US dollar selling/buying prices.
On August 6, the interbank forex rate was announced at 16,491 dong/US dollar adding the trading amplitude of 2% so banks could list the selling price at 16,820 dong/US dollar. In fact, banks only used 1% amplitude.
According to Le Quang Trung, business director of France's BNP Paribas Bank in Vietnam, the US dollar/dong exchange rate since the start of this year has surged 4% and now the market was gradually stable. The fact is that residents' psychology was stable also thanks to July inflation ratio stood at the lowest level from January.
While the disbursement of FDI in remaining months of 2008 is forecasted to increase sharply, US dollar supply is expected to be more stable. Currently, the government also released many measures to control imports to reduce trade deficit and US dollar demand as well.
Le Xuan Nghia, head of SBV's Banking Strategy Department said, the forex rate depends on trade deficit that is estimated at about US$20 billion this year and will be offset by other stable US dollar supplies such as overseas remittance, ODA, and FDI. In addition, SBV's foreign currency reserve is higher than total US dollar deposits and short-term debts so the regulator is ready to intervene and stabilise the market, he added.
Another factor affecting to the dong/US dollar forex rate is the rally of US dollar in the world market. However, in Nghia's opinion, the sharp drop in Vietnam's CPI adding to the increasing foreign capital inflow, the dong could appreciate against the green banknote.
In related news, the domestic gold price yesterday continued declining another 210,000-230,000 dong/ounce. SJC gold was sold at only 17.96 million dong/ounce and PNJ at 17.94 million dong/ounce. Meanwhile, the global gold price also kept falling down to US$878/ounce.
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