As one dollar market is cleared away, another appears

Foreign exchange shops on Ha Trung Street, the “foreign currency street” in Hanoi, all have shut down after great efforts by the State Bank to eliminate the foreign currency black market. However, another black market is arising.

The new dollar market is located on Dinh Le and Nguyen Xi streets in the center of Hanoi. In fact, the market has existed for a long time already, but it was less bustling than Ha Trung market. Since Ha Trung has stopped transactions, Dinh Le-Nguyen Xi market has become the destination for people who want to sell or purchase dollars.

At first sight, one would not recognize that foreign currency trade activities are taking place, because there is nothing strange on the two beautiful streets. It is now more difficult to find traders than previously, because they have become more cautious after the central bank launched the campaign to eliminate the black market.

Most of traders now wait for clients at pavement teashops. They do not show great warmth or welcome clients solicitiously. Those people have to inquire to find them. The traders only make transactions with those people who they think are “reliable”, i.e.: people who have real demand for foreign currencies, not policemen or inspectors who have disguised themselves as dollar buyers.

Though the market runs silently, it is relatively bustling. Dat Viet’s reporters, who were present at the market on March 16, reported that two people came to ask to purchase dollars within 15-20 minutes in the morning, though it was rainy and cold. At first, when the people said they have the demand for purchasing dollars, a woman trader told them that they should go to another place, because she had no dollar to sell. However, just minutes later, the woman realized that the people had real demand for dollars. With “mutual understanding”, the two sides discussed about the volume of currency to be traded and about prices. After the two sides reached an agreement, they moved to another place where real money would be delivered.

Dat Viet’s reporters, acting as clients who wanted to purchase dollars, came to a teashop on Dinh Le street. The shop owner, T, shook his head when the reporters said they wanted dollars. “No one dares to make transactions these days,” he said.

However, in the 10-minute conversation, the reporters tried to persuade the man that they really wanted to purchase dollars to import a consignment of cosmetics. After the convincing story, the man left the shop for a while and told the reporters to wait. He returned after 15 minutes and said he had dollars to sell.

When the reporters asked the man if he had 10,000 dollars to sell, he answered that he has enough dollars to satisfy the demand. “You should go home and return after two hours. The delivery will made at my home,” he told the reporters and gave the address of his home.

Bookstore owners on Dinh Le street told reporters that the new black market has been operating for one week after the Ha Trung market shut down. At first, the market only had several members – several women acting as the sellers. Since then teashop owners and car keepers have also joined the market, acting as “brokers” who connect clients and real traders.

According to Tien phong, the dollar price applied at Dinh Le market hovers around 21,900-22,300 dong per dollar. However, the dollar price at which traders purchase from clients is low, just 20,800 dong per dollar. Despite the high prices, a lot of people still have to accept deals, because they have no other choice. People still cannot purchase dollars from commercial banks, even if they show all necessary documents to prove that they have legitimate demand for dollars. Meanwhile, banks say the dollar supply is not large enough to satisfy demand, and that they can only sell dollars to loyal clients.

Explaining the high dollar prices, T said there are now more buyers than sellers, therefore, the prices have been pushed up. – Vietnamnet

Tags: Vietnam forex market