The US dollar buying price at banks continued rising and reached 19,090 dong/US dollar, lower 10 dong/US dollar than the selling price. Meanwhile, US dollar interest rates were kept sustainable whereas the negotiated rate of medium and long loans in dong jumped to 17 percent pa. Therefore, many enterprises shifted to borrow US dollar instead of dong, however they still are afraid of forex rate risks as banks' US dollar source may not be able meet their demand.
At Vietcombank, the US dollar/dong forex rate on Tuesday stood at 19,070, 19,070 and 19,100 dong/US dollar for the transactions in cash, account transfer or selling, up 20 dong/US dollar against the last weekend.
In some other commercial banks, the buying price was listed at higher level. Eximbank and ACB applied the forex rate at 19,090 and 19,090 dong per US dollar on cash purchase and account transfer transaction. Customers also could sell US dollar at 19,090 dong at Saigon Hanoi Commercial JS Bank (SHB).
Hence, the forex rate gap between official and free markets was shortened. Also the buying-selling price difference of credit institutions was narrowed to 10-30 dong/US dollar.
According to statistics of State Bank of Vietnam (SBV), the negotiation based lending rate of the dong is common at 12-14 percent pa at state banks and 15-17 percent pa at joint stock banks under Circular No 07/2010/TT-NHNN dated February 26, 2010.
Meanwhile, US dollar lending rate saw a little change. State commercial banks provide US dollar loans at around 5.5-6.0 percent (short term) and 6.0-7.0 percent pa (medium and long term). The loan rates of joint stock banks are 6.0-8.0 percent and 6.5-8.0 percent pa at joint stock banks. Even familiar customers can take bank loans in US dollar with 3.5-4.5 percent pa. Logically, some businesses decided to borrow US dollar at lower rates instead of the dong.
Foreign exchange director of a Hanoi based commercial bank said that, those shifted to borrow US dollar loans in order to meet a part of their capital demand because of lower rates, expressed concern and said that they still are afraid of forex rate risks.
Import companies are considering lending the dong or shifting to US dollar loans because they could not control and forecast forex rate movements.
Total US dollar source, that big groups re-sold to credit institutions according to the prime minister's order, reached $450 million till the start of February 2010. To date, no latest statistic has been updated.
Last week, total US dollar trade of the interbank market gained approximately $2.052 billion, averaging $342 million a day, falling $110 million against the previous week. Overnight US dollar trading turnover attained $648 million, accounting to 32 percent of total trade of whole week.
After surpassing 21,000 dong/US dollar on February 26, the dong with the 12-month terms on Singapore market continued depreciating against the greenback down to 21,545 dong/US dollar on March 8. This was also the lowest rate from October 28, 2008.
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